Presented By: RXR Realty
RXR Realty’s Grand Central Properties Break New Ground in Amenity Retail Programming
In a challenging retail environment, innovative approaches are required to attract and retain the most desirable tenants. With its Grand Central portfolio of office properties, RXR Realty, a vertically integrated owner, operator, and developer in the New York Metropolitan area, is utilizing these Grand Central properties to break new ground with its forward-thinking approach to amenity retail programming.
RXR owns four buildings within four square blocks of the Grand Central Terminal: 340 Madison, 230 Park (The Helmsley Building), 237 Park (also known as 460 Lexington), and 450 Lexington.
Together, these properties house over 67,000 square feet of retail space. RXR considers these four buildings to be one unified campus, allowing the company to program outlets that can best serve the everyday needs of their tenants while ensuring that the retail in one building complements the retail throughout the portfolio.
When evaluating potential retail establishments for these properties, the company looks beyond just the financial factors to also consider how a retailer might serve all of the company’s local constituencies, including both their tenants and the general Grand Central community. In addition to sales numbers, RXR looks at how potential retailers interact with their customer base, how technology driven they are, whether they develop experiential programming to drive store traffic, and how they think outside of their regular product mix, in order to ensure an overall retail offering throughout the portfolio that fully serves everyday needs.
“RXR programs their buildings to engage with the community,” said Michael O’Neill, executive managing director, Retail Services, Cushman & Wakefield (CWK), the broker for RXR’s Grand Central Retail properties. “We encourage retailers to think creatively about how to better serve both the tenants within the RXR GCT portfolio and the surrounding office community. RXR has a critical mass, so we can curate a mix for all four buildings, as one cluster, that makes sense together.”
To accomplish this, RXR takes a more strategic approach to compiling their retail mix than property owners normally would, creating community-building opportunities as opposed to just filling space with the most profitable outlets. The company looks at a broad range of potential retailers, curating just the right mix of food & beverage, medical, fitness, and more.
“It inspires retailer confidence knowing that their presence here makes them part of a strategically thought-out retail mix,” said O’Neill. “With so much competition in Manhattan, retailers benefit from a landlord that thinks strategically about limiting direct competition among brands within their portfolio as well as curating a mix that is accretive to driving traffic and the retailer’s success.”
When Duane Reade left RXR’s 230 Park property, the company weighed their options carefully. Knowing the area was in need of more contemporary healthy food options, they decided to bring in the salad chain Sweetgreen to fill the space. For another opening, they brought in Tend, a hospitality-driven dental facility. RXR is being deliberate in how they populate remaining spaces in order to determine the best mix of uses.
This approach provides retailers with a chance to place themselves in an enticing and profitable pre-formed community.
“It’s a unique opportunity because RXR owns some tremendous assets in very close proximity to each other,” said Jason Greenstone, managing director of Retail Services for Cushman & Wakefield. “This allows RXR to view these properties as an integrated campus, and program the buildings to create a really diverse amenity program that fits the theme of the campus.”
One tremendous benefit for retailers in this four-building cluster, which hosts 11,600 workers daily within 4.3 million square feet of office space, is that RXR provides numerous opportunities for cross-promotion, ensuring that workers in all four buildings are familiar with the entire portfolio.
RXR arranges everything from unique activations in its building lobbies and common areas to providing additional promotional support across its digital communications platforms. So a retail tenant at 237 Park will be cross-marketed at 230 Park, 450 Lexington, and 340 Madison at the same time.
“The locations, with a tremendous amount of traffic and density, speak for themselves, but it’s an added bonus when you have a landlord that helps market your business and drive traffic to your space, both internally and externally,” said Greenstone. “Retailers view that as a real benefit to being in an RXR portfolio building.”
RXR also seeks out opportunities for pop-ups and lobby amenities that could spur a new round of excitement about their retail. Bandit Coffee, a mobile coffee retailer that facilitates orders only through their app, recently established a pop-up space in the lobby of RXR’s 237 Park Avenue property. Due to the nature of their business, which includes a modular work area, Bandit Coffee outlets can be set up in a matter of hours. Given the lack of build-out costs, Bandit can charge less for their coffee than other high-end coffee shops, a benefit for RXR’s tenants and the surrounding community.
“Bandit launching in Grand Central is practically its own amenity given the tremendous traffic here. But RXR’s cross-promotional efforts have supercharged our efforts and helped us build a loyal customer base of daily coffee drinkers,” said James Gallagher, co-founder of Bandit Coffee. “Truly effective advertising that draws traffic isn’t easy to come by and isn’t inexpensive when you find it. Knowing that RXR holistically promotes our business in nearby buildings packed with thousands of regular employees, in elevator banks and other places where we know everyone there will see it, adds significant value to our tenancy.”
The company also takes advantage of its active retail programming to support local businesses. Urbanspace Vanderbilt, the food hall at the company’s 230 Park property, hosts over 20 New York City-based food vendors, including Black Iron Burger, Roberta’s Pizza, and Mayhem Sandwiches.
This new retail philosophy also takes certain recent trends to the next level. As owners have been redesigning their office buildings for a new generation, with grander lobbies, spacious balconies, easier access to food and beverage and more, making retail serve as one more useful and desirable amenity is the ultimate in customer service and community improvement, while also creating opportunities for non-traditional retail uses.
In considering their lobby and retail space, RXR seeks to go beyond traditional long-term uses, by housing select spaces for everything from fashion shows to product launches, or art exhibitions to culinary experiments.
“We seek opportunities that can be both convenient and engaging for our customers within our properties and the neighborhoods around them,” said Whitney Arcaro, Executive Vice President, RXR Retail. “We create programs from these opportunities, threading the programs through various areas of our properties, and then we proactively measure feedback to determine the best mix of uses.”
This innovative RXR approach is developing, and the company expects to announce several new retailers for their Grand Central properties shortly. But even now, it’s clear that RXR’s forward-thinking, all-encompassing approach to retail programming will provide stark and long-lasting benefits to its tenants, community, and retailers alike.