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Category ArchiveCrown Retail Services

Euro Retailers Sense Opportunity Here While US Brands Look to Old World for Salvation

Last week, while JLL retail pro Michael Hirschfeld was in London for business, he learned of three U.K. retailers collapsing.

Those were the U.K. arm of Toys “R” Us, which went into insolvency administration, Maplin Electronics, which failed to find a buyer to get it out of administration, and dining chain Prezzo, which is being restructured. In addition, the 600-fleet London fashion chain New Look is looking to make deals with landlords to close underperforming stores and reduce rents.

The news sounds eerily similar to headlines in the U.S. as bankruptcies, e-commerce and the popularity of discount department and specialty stores have impacted the retail business on both sides of the pond.

“I think the retail challenges are universal,” said Hirschfeld, a vice chairman of national retail tenant services at JLL who spends 80 percent of his time bringing retailers from Europe to the U.S. and vice versa.

This comes, however, with a big caveat.

It is often said that what happens in the U.S. market will then follow in Continental Europe and Great Britain. But JLL warned in a retail report comparing the U.S. and Europe at the end of 2017, “we shouldn’t assume markets automatically mirror each other.”

In Europe, and the U.K. in particular, retailers braced themselves for the change in shopping patterns due to e-commerce faster and earlier than did their U.S. counterparts, according to the JLL report.

And beyond the internet, there are clear differences between the two markets.

One of the big ones is the sheer amount of retail space available in the U.S., in large part due to an excessive number of shopping centers. In the U.S., there is 13,713 square feet of leasable shopping center space per 1,000 people, JLL determined at the end of last year. In the U.K., by contrast, there is 3,175 square feet per 1,000 people, and in Europe as a whole, there is 2,335 square feet.

And the European retailers smell the opportunity—many view the U.S. as if “it’s on sale,” Hirschfeld said. “You’re seeing rent levels that you could achieve in the financial crisis. It’s a very opportune time. The demand is super strong.”

Hirschfeld brokered deals to bring British clothing company Superdry to various cities in the U.S. and is working on a deal for British toy store Hamleys to come to New York City. Accessories brand Furla, which comes from Milan and already has a store in Manhattan, is expanding with a new lease in Aventura Mall in Miami, Fla. (one of the top malls in the country), and one in the Forum Shops at Caesars in Las Vegas (another top U.S. mall) with likely another three or four more in major markets, he said of his client.

Susan Kurland, an executive vice president and a co-head of global retail services at Savills Studley, said that the difference between retail in Europe and the U.S. is the vacancies.

“The difference is their spaces are filled,” Kurland said. “You walk down our Madison Avenue, and almost every store on Madison Avenue is available.”

She is working with a high-end Chinese-owned Milan-based company, which is looking to enter the U.S.

“[The owner] feels the only places to expand are China and the U.S. as those are the two most important markets,” the broker said. “They’re in…the exclusive places in China. They’re on the important street in Milan. He feels that the U.S. is really important for his expansion.”

While there will be more store closures in Europe, JLL determined that the continent is “unlikely to experience the sheer volume of closures currently being forecast in the U.S.”

Another distinction between the U.S. and Europe is that most of Europe employs a high-street model rather than a shopping-center model. Furthermore, in shopping centers, the U.S. has relied on department store anchors (which have been one of the worst victims of e-commerce and commoditization), JLL noted. In Europe, on the other hand, shopping mall owners have been quick to switch gears with their anchor tenants, often turning to food-and-beverage concepts, and they are more diverse in their offerings.

Yet another important difference between European and U.S. leases is the rent structure. In the U.S., when a tenant signs a lease it knows what the rent is for the entire term. In the U.K., for example, you may sign a 10-year deal, but every couple of years you go through a fair-market rent review process, Hirschfeld said, so you don’t know your rent.

But one thing both places have in common is that consumers have so many options for how they want to shop.

“We’re seeing across the board a fragmentation of distribution,” said Betsy McCullar of Hilltop Alliance, who develops and executes marketing and strategy solutions for brands and businesses. “Western Europe is even more fragmented than the United States because, for example, the U.K. and Germany—and France, to some extent—have a big mature structure of department stores. But Italy and Spain are still dominated by one-off specialty stores.”

Among the European brands that are on the fast track in the U.S. are fast-fashion brands Swedish Hennes & Mauritz (H&M), Zara from Spain and the U.K.-based Reiss Ltd., The Wall Street Journal reported in May 2017. Amsterdam-based Scotch & Soda is also popping up in the U.S. with 28 free-standing retail stores, with a store at Woodbury Common Premium Outlets in Central Valley, N.Y. opening on March 30. European discounters like German grocer Aldi, German competitor Lidl and Irish clothing company Primark are on a tear in the U.S., Bloomberg Gadfly pointed out last October. International cosmetics companies like Rituals from Amsterdam are taking New York City by storm. Plus there are food chains like Wagamama, an Asian food concept that actually hails from London, that has set up shop in New York City and Boston.

When entering the U.S., European retailers focus on major cities for entrée.

Since they’re used to high streets at home, European retailers want to rent on a U.S. high street. And they generally enter by way of one of the gateway markets of New York City, Miami, Los Angeles, San Francisco, Chicago and Las Vegas, Hirschfeld said. They often choose a U.S. location that is most similar to where they hail from, Hirschfeld said.

“Brands usually like to do either the East Coast or the West Coast initially, and I believe that most start on the East Coast first,” said Robin Abrams, a vice chairman of retail at Eastern Consolidated, with New York City being a priority due to its tourist population, ease of navigation, walkability and great public transportation. For U.K. retailers, New York is logical, Abrams said, “because it is more similar” than other places in the U.S.

Interestingly, CBRE’s most recent annual global retail report highlighted Philadelphia as a target city for international retailers in 2016. That year, Italian furniture company Natuzzi Italia and Superdry set up shop in Philadelphia, the fifth-largest city in the U.S. The market was appealing, the report said, because of its increased millennial population, income growth, new multihousing developments, burgeoning food and retail scene and reputation as a tourist destination.

But there’s no refuting that New York City often is the beau ideal market for European retailers looking to expand abroad.

21 Euro Retailers Sense Opportunity Here While US Brands Look to Old World for Salvation

“Retailers looking for a first or second opportunity look at New York,” said Mark Kostic, a vice president of retail leasing in the U.S. at Brookfield Property Partners. “Everyone’s next step is a global flagship in New York.”

Kostic worked on the deal to bring European suitmaker Suitsupply to Brookfield Place. The brand has fared well since the men’s store opened about a year ago, and the women’s store Suitstudio opened this past November, he said.

Jason Pruger, an executive managing director at Newark Knight Frank, said he will be helping Black Sheep Coffee expand from London into the U.S. come springtime. He anticipates that Black Sheep will enter the country by way of New York City.

“We are looking to expand in the U.S. because we have be inundated with customer requests, particularly in the last few months—mostly Americans living in the U.K. or who came across Black Sheep while visiting the U.K.,” said Gabriel Shohet, one of the co-founders of Black Sheep Coffee. “New York City has many Black Sheep fans but is one of four U.S. cities [including Chicago, Washington, D.C.. and Atlanta] we have shortlisted as a potential starting base for a U.S. market entry.”

Faith Hope Consolo, the chairman of Douglas Elliman’s retail leasing, marketing and sales division, said that New York City is “the shopping capital of the world, and the No. 1 leisure activity in this country is shopping. Yes, New York City is the center of the world. Companies are willing to risk everything to make it here. Just like the song goes, ‘If you can make it here, you can make it anywhere.’ ”

Going the other way, U.S. retailers often start in London for their European expansion, where English is the native language. Indeed, companies from the U.S. marked the majority of new international retail entrants to London in 2016, according to CBRE’s global retail report. (Hirschfeld called London “probably the retail capital of the Europe in many ways.”)

But London is desirable for just about any retailer looking to make an entrance on a global stage. “Overseas brands continue to see London as the pathway to greater expansion” in Europe, the Middle East and Africa, or EMEA, the CBRE report said. London was the second most-targeted market globally for international retailers entering new markets in 2016 (behind Hong Kong) and 10 markets in EMEA made the list of 19 global cities with the greatest international retailer presence. And this was the year of the Brexit vote for the U.K. to leave the European Union, so presumably the vote did not rock anybody’s faith in London retail.

At the end of last year, New York-based high-end fitness brand Equinox opened its first standalone E by Equinox location—an even higher-end Equinox—in central London. “Opening our first standalone E by Equinox in one of the most esteemed neighborhoods in London was only fitting,” Gentry Long, the managing director of U.K. operations for Equinox, said in a press release in December 2017. “We’re thrilled to introduce an elevated take on the private members’ establishment with fitness at its core.”

Some in-demand cities for U.S. retailers going abroad are Germany’s Munich, Berlin, Hamburg and Frankfort for fashion brands and food and beverage brands, Hirschfeld said. And there’s Paris, France and Milan, Italy. He has not seen a lot of demand for a Spain brick-and-mortar location.

In the last coupe of years, Hirschfeld’s team has brought Detroit-founded Shinola watch, bicycle and leather company to London. And his team brought Seattle-based outerwear company Filson to London.

“What you must look at when you’re looking throughout Europe, or Asia or South America is products that are transferrable to other markets,” Virginia Pittarelli, a principal of Crown Retail Services whose clients have included Sephora and Godiva, told Commercial Observer late last year.“That’s really the key.”

Source: commercial

Video: Pop Damn! How Pop-Ups Are a Year-Long Phenomenon

It’s not just for the holiday season. Love ’em or hate ’em, pop-ups are here to stay. Retail Details looks at why they’re advantageous for tenants and landlords. We check in with Los Angeles’ jewelry retailer Vrai & Oro as they build out a space that they got on Mott Street via Appear Here.

Source: commercial

Street Retail Looks to Malls in Figuring Out Ways to Cope With Big Rents

While malls and shopping centers are looking for ways to save themselves from crushing retail headwinds, at least one group thinks they’ve got something to learn from them: street retail.

The guys with the shops on the sidewalk are taking a page out of their playbook when it comes to structuring deals.

Young retail companies, e-commerce brands and even some legacy retailers looking for a brick-and-mortar presence are asking for terms long found in shopping centers—low base plus a percentage rent (meaning the retailer pays the landlord a certain percent of every dollar in sales over a certain threshold).

“That shopping center formula has morphed onto certain streets—not all streets—around the country. [It] sometimes bridges a gap between what a landlord is looking to achieve with his overall rent and what the tenant feels they can pay with respect to what their sales projections are,” said tenant representative Virginia Pittarelli, a principal of Crown Retail Services (an affiliate of Crown Acquisitions).

These percentage-rent-plus-base deals allow retailers to test out the market with minimal risk by not being locked into a guaranteed rent and give landlords an activated space along with some income. Such deals are being done across the retail spectrum and around New York City for leases as long as 10 years.

Typically in base-plus-percentage-rent deals, the landlord gives a 20 to 50 percent discount to market gross rent, plus a percentage of sales between 8 and 12 percent, according to Christopher Conlon, the executive vice president and chief operating officer of real estate investment trust Acadia Realty Trust.

Robin Abrams, a vice chairman of retail at Eastern Consolidated, explained the percentage-rent formula as follows: If the rent is $500,000 per year and the tenant agrees to a percentage rent of 8 percent above a natural breakpoint (where the base rent equals the percentage rent), the calculation is $500,000 divided by 8 percent with that 8 percent equaling the natural breakpoint above which the tenant pays. So a tenant would pay 8 percent of sales in excess of $6.3 million annually. As the rent increases over the term, the natural breakpoint increases.

“Sometimes the landlord requires an unnatural breakpoint,” she added, “and might say to the tenant that he wanted a million [dollars] in rent, and he won’t wait till sales are $6.3 million but wants the percentage rent over sales of $5 million, or whatever minimum sales figure landlord and tenant agree.”

Abrams and her team are submitting an offer for a restaurant space in an “unchartered neighborhood” where the asking rent is $1.4 million per year. The offer includes a base rent of less than half of the asking rent along with a percentage rent at lower than the natural breakpoint.

These deal structures aren’t confined to less trafficked and less high-profile areas of the city.

Lee Block, an executive vice president at Winick Realty Group, said that while he hasn’t closed any deals that incorporate a percentage-rent component, “we’re considering it on a handful of spaces that we represent.” That was the message conveyed by many brokers and landlords with whom Commercial Observer spoke.

The reason? A surplus of space and a changing retail climate.

Jared Epstein, a vice president and principal at real estate developer Aurora Capital Associates, said his company is negotiating a few deals in Soho with a “slightly reduced base rent and feature a percentage rent above a natural breakpoint, which we believe will enable the landlord, our entity, to attain market rent and likely exceed market rent so long as the store does the volume that we believe it will.”

And that is because of the high vacancy rate in Soho, Epstein said.

“In general,” Epstein said, “in any deal that features a percent rent in lieu of an amount of fixed rent, the landlord hopes to set a low break point and a large enough percent above that, which will make it probable that the landlord will achieve the total base rent it hoped to achieve. The landlord has to believe the retailer will do the business to get the landlord back to its base rent. Sophisticated landlords will offer the downside protection of a discounted base rent in this market but will also want to participate with the tenant on the upside as their business outperforms.”

For most deals to get done, then, landlords need to be flexible.

“In the last 12 to 24 months I think owners that can be more creative with percentage deals are doing it,” said Jeffrey Roseman, a founding partner of Newmark Knight Frank’s retail division. “Not every owner has the ability to do it because they may have certain restrictions from their bank or they may have paid too much for the property. [But] it’s a new creative way to get deals done.”

True, landlords need to be open to different deal structures, Conlon said. While Acadia hasn’t done deals for a low base plus percentage rent, it is “considering them now,” he said, adding that Acadia would only do them for short-term deals, or those less than three years.

Not all landlords, though, are biting.

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SOHO STRUCTURES: In today’s market, landlords across the city, including in Soho (above) are considering retail leases with a small base plus a percentage rent rather than just a gross rent. Photo: Getty

Triangle Assets doesn’t plan to do any percentage-rent-involved deals, according to Benjamin Stavrach, the director of leasing and property management at the company.

“New tenants have talked to us about percentage-rent deals, and we have held back,” Stavrach said. “It’s a different business model. It’s not something we want to get our hands dirty with. [And] as a landlord I don’t have to give it.”

With percentage-rent deals, he noted, a landlord has to “trust” the tenant will be successful and is honest with its sales records. “You are almost investing in the tenant,” he said.

Instead, to get deals done, Triangle Assets—with its 83,000 square feet of street retail space—may lower the rent in a gross-rent deal.

Michael Brais, a food-and-beverage retail broker with Douglas Elliman Commercial, who is leasing up the F&B component at the BFC Partners-led Empire Outlets outdoor shopping center on Staten Island, said he is working a lot with the percentage-rent structure.

Indeed, at Empire Outlets, the F&B component totals 50,000 square feet, of which 5,000 square feet remains available. Almost all the deals were negotiated with a combination of base plus a percentage rent, and the same goes for the majority of Brookfield Property Partners’ retail agreements.

That structure can be a win-win for both sides of a deal, some brokers said.

“It is fairly established, particularly in shopping centers with base and percentage rent,” Brais said. “Lower base helps the operator hedge against lower sales and helps the landlord participate in the upside.”

Malls and shopping centers historically have implemented the percentage-rent formula as a “hedge against inflation,” Conlon said. Without such clauses, rent increases are typically a “modest 1 to 2 percent annually or 10 percent every five years.”

Thomas Dobrowski, an executive managing director with Newmark Knight Frank based in New York City, handles regional mall investment sales nationally. He said the formula started to become more popular after the 2009 recession, “when dozens of malls were foreclosed on by lenders and special servicers. To placate tenants and keep them at these properties that were distressed and transitioning, percent-rent deals, along with short-term leases, became more common and enabled new owners of these malls to keep many national tenants that would have closed open and operating. The trend continues today and is becoming more common at stabilized properties as well.”   

This model is good for tenants in a market where rents are outrageously high, but it’s good for landlords when the tenant does gangbusters business. In this market, it is more beneficial for the tenant. 

“The tenants have the upper hand these days,” Dobrowski said. “These national retailers have a lot more leverage than they did in the past, and they are exercising whatever rights they have or proposing structures that are benefitting them.”

One of the things holding landlords back from doing too many percentage-only deals, which are very common in enclosed malls, is they can make the real estate difficult for lenders to underwrite. The underwriters “don’t like to see zeros anywhere,” Brais said.

While Conlon doesn’t think inclusion of percentage-rent will become the new “norm for deal-making,” Brais said he expects percentage-rent deals to “become more prevalent” because of the difficulty of getting spaces rented.

For now at least, deal terms are changing.

“Across the board, all streets, all landlords are being creative because we have an abundance of available space in the market,” Pittarelli said. “And the best for any type of market like this is to fill those spaces and if you can fill those spaces by being creative and working with a credit-worthy, great-image-quality retailer, why wouldn’t you?”

Source: commercial

MAPIC 2017: Retail Headwinds Can’t Cloud the Vibe in Sunny Cannes

At this year’s MAPIC in Cannes, France, there was a mix of concern as well as optimism.

Fred Posniak of Empire State Realty Trust told Commercial Observer that there was “no doom-and-gloom” vibe at the international retail property trade show—and if attendance at MAPIC was any indication, things aren’t so bad. This year’s attendance was up 100 people to roughly 8,500 participants from 2016, according to MAPIC Director Nathalie Depetro. Like last year, attendees hailed from 260 countries around the world.

In New York City specifically, deals are starting up again after a dry spell, as evidenced by the recent transactions involving Levi’s, which is moving its Times Square store to a new 17,250-square-foot location at 1535 Broadway, and Vans, which agreed to take 8,573 square feet for its second Manhattan location at 530 Fifth Avenue.

“I think there is momentum,” said Lee Block of Winick Realty Group.

Still, in order to get deals done, tenant rep Virginia Pittarelli of Crown Retail Services said that “for the right kinds of tenants across the board, all landlords are being creative because of the abundance of space.” That means more tenant improvement allowances and less traditionally structured terms, such as lower base rents plus percentage rents (as in percentage of retailers’ sales).

And landlords have also been more open to doing pop-up deals, according to Cushman & Wakefield‘s David Gorelick.

But there is no arguing that there are issues facing retailers in the U.S., with department stores cited as a serious case in point.

“I see department stores going in a downward spiral,” said Salvatore Ferrigno of Newmark Knight Frank. As many have noted, “the writing is on the wall” for department stores and they “have to evolve,” said C&W’s Gene Spieglman.

The same applies to individual retail brands. Brookfield Property PartnersMark Kostic said it is “important for each store to be relevant,” while Robin Abrams of Eastern Consolidated advised that retailers need to key in on their vibe and brand, among other things.

But the retail situation isn’t as grim internationally, according to one market watchdog. While the U.S. is experiencing a “collapse [in] retail activity,” the downturn is “less dramatic” in other countries,  said Mohamed Haouache, the founder of online short-term retail leasing platform Storefront.

Source: commercial

Christopher DeCrosta Sees Apple, Tesla and J. Crew as Just the Beginning for Brooklyn

It’s hard to imagine a day when every brand isn’t in Brooklyn. It’s crazy to think that a city as big as Brooklyn doesn’t already have all of the big brands.”

So said Crown Retail Services broker Christopher DeCrosta.

The broker is a firm believer in the church of Brooklyn and has long been a high priest in the effort. He (alongside colleague Hank O’Donnell) helped J. Crew find its first Brooklyn location at 234-236 Wythe Avenue in Williamsburg in 2014. When Elon Musk’s Tesla needed a showroom, it was DeCosta who inked the deal for a space in Red Hook. And one shouldn’t forget Apple—DeCrosta had a hand in getting the tech giant its Williamsburg locale.

Brooklyn may have been a transient place even a decade ago, DeCrosta said.

“Brooklyn was always a means of servicing Manhattan,” DeCrosta, 37, said. “If you lived in Brooklyn, you went to work in Manhattan and then you went back to Brooklyn. You shopped in Manhattan. If you made a little money, you left Brooklyn.”

Not any more. Today, tenants want to be in Kings County, and DeCrosta’s job is more about education—ideal neighborhoods and buildings—and less about convincing. 

buildingphoto12 Christopher DeCrosta Sees Apple, Tesla and J. Crew as Just the Beginning for Brooklyn
Tesla’s building at 160 Van Brunt Street in Red Hook.

Tesla is a good case in point. “They knew they needed a place to get cars serviced,” DeCrosta said. “They needed a place to have a showroom. And they knew they wanted to be in an area that was convenient to Manhattan and that could also capture the Brooklyn market.”

They just didn’t know where in Brooklyn all these needs could be met. DeCrosta found the electric carmaker a 40,000-square-foot service and showroom at LIVWRK’s 160 Van Brunt Street between Summit and Bowne Street in March of last year.

Then DeCrosta and O’Donnell worked with Johnny Siegel of Open Realty Advisors to represent Apple and find its first Brooklyn location at 247 Bedford Avenue in Williamsburg, a property owned by RedSky Capital. Lee & Associates NYC represented the landlord in the 20,000-square-foot transaction. The store opened in July last year, around the same time as the Williamsburg Whole Foods across the street at 238 Bedford Avenue.

“He was instrumental, truthfully,” said Benjamin Bernstein, a principal and co-founder of developer RedSky Capital. “We had a unique asset on Bedford Avenue. We showed it to him and his team. He believed it was perfect for Apple. We had a great first meeting. He brought the national representatives. And they loved our real estate. We were lucky we had the same vision for our asset that they did.”

DeCrosta has been on something of a Williamsburg kick lately—he and O’Donnell recently represented two companies in their entrée to the borough—British skin care brand Rituals Cosmetics at 117 North 6th Street and Flywheel, a growing fitness concept, at 173 North 3rd Street, both in July 2016.

“I think he developed relationships with specific tenants that really are on the cutting edge of cool,” Bernstein said. “The brands he focuses on and chases, they are not just paying attention to Brooklyn. Their head of marketing [and] their head of design lives in Brooklyn. So he comes off as genuine. He lives in Carroll Gardens, [Brooklyn].”

It almost feels blasphemous that DeCrosta’s operations at Crown Retail are run out of Manhattan offices, where he has been since 2012 and specializes in representing retailers. He runs a team of four brokers, including O’Donnell.

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Williamsburg Apple Store. Photo: Kena Betancur/Getty Images

Working in an office on the 24th floor of the GM Building at 767 Fifth Avenue between East 58th and East 59th Streets, DeCrosta was the only employee that Commercial Observer spotted without a tie, without his shirt tucked in and without dress shoes (he was wearing burnt orange loafers).

A native of New Haven, Conn., DeCrosta went to Kenyon College, a liberal arts college of roughly 1,500 students, in the small town of Gambier, Ohio. He earned an English degree and took off for New York City after graduating in 2001.

“I fell in love with Brooklyn right after 9/11,” DeCrosta said. “I had moved to Lower Manhattan-post 9/11, and because Lower Manhattan was in the process of being rebuilt and low on amenities, half of the time I went out, I would end up in Brooklyn. That was 2001 to 2002. It’s when a lot of the restaurants started popping up [and] good bars. It’s when the Brooklyn culture as we know it started.”

He moved to Brooklyn in 2005. Today, he lives with his wife Luciana Francese, a director of leasing at Acadia Realty Trust who oversees transactions at City Point for the landlord. DeCrosta and Francese first met at the annual International Council of Shopping Centers event in Las Vegas in 2012 and have been married for more than two years. They have not done deals together—except if you count the couple’s 1-year-old daughter.

DeCrosta and his wife are extremely enthusiastic cooks, and he is an avowed non-jock. (Asked if he runs or exercises, he dead-panned Kenny Powers: “I’m not trying to be the best at exercising.”)

“Our idea of a good Saturday is going to local shops—like The Meat Hook in Williamsburg, go to our local produce guys and then we cook a big meal,” DeCrosta said. “Traditional Italian stuff. And we try to incorporate new recipes.” 

“He’s really into food, and that’s one of the things that we bonded over,” said Cushman & Wakefield Executive Managing Director Steven Soutendijk, a friend of nearly a decade. Soutendijk and DeCrosta have worked on opposite sides of deals in the past, such as one for cosmetics retailer L’Occitane on the Upper West Side.

DeCrosta’s foray into real estate started shortly after graduating college and moving to New York City with just $700. He became a canvasser for Madison Retail Group, which was being run by industry veteran Virginia Pittarelli. He met Pittarelli, who is currently a principal at Crown Retail, through a mutual friend, and she hired him in June of that year.

Later in 2001, he took continuing education courses at New York University to earn his broker’s license.

“I knew he had great potential,” Pittarelli said. “He was a very bright young man. He had a wonderful work ethic. He wanted to learn and he wanted to succeed. And he did something that a lot for young people find challenging: he made it a point to learn and understand the business, because he wanted to provide the best advice to his clients. Not just for the retail estate perspective, but from a retail point of view.”

DeCrosta’s first deal came in the spring of 2002. He represented a store called Saigon East on 237 Mulberry Street in Nolita, which sold Vietnamese products, such as vases, plates, lamps and other household items.

“I’ve always been attracted to the emerging markets,” DeCrosta said. “They always seem more interesting than the more established ones.” (Back then, Nolita was nowhere close to as pricey and yuppified as it is now.)

Indeed, Brooklyn was hardly his first rodeo. The Financial District was first. He worked to bring Tiffany & Co. to FiDi in 2006, when the area was going through a transformation with new retail. The company signed a 7,700-square-foot lease at 37 Wall Street.

In January of that year, French leather goods dealer Hermès, signed a deal at 15 Broad Street.

Tiffany’s representative, the late broker Ray Carew of GCD Consultants, was a mentor to DeCrosta. Carew mentioned to DeCrosta that Tiffany may be interested in Downtown as well, although it would be a “long shot.”

At the time, DeCrosta was living Downtown and saw a vacated space near his apartment at 37 Wall Street. He showed the space to Carew, who told Tiffany and weeks later the deal was signed in June.

Tiffany was interested in having a store Downtown “post 9/11 to be part of that rebuilding there,” DeCrosta said, and to tap into population of office workers and residents living there. Plus the rents were nothing like Fifth Avenue, where the jeweler with the iconic blue box has a flagship.

“You have to remember to the rents [Downtown] at that point were $100 a foot,” DeCrosta said. “It was certainly a risk but less so than a $1,000-a-foot gamble.”  

DeCrosta left Madison Retail Group in 2011 for a stint with Thor Equities but departed from that firm the following year for a bigger role at Crown Retail, where he has been since.

One recent notable transaction was last November, DeCrosta represented Apple in a deal for its second store in Brooklyn, a 12,000-square-foot space at Two Trees Management Company’s 300 Ashland Place between Lafayette Avenue and Hanson Place in Fort Greene, as CO previously reported. (Due to nondisclosure agreements with Apple, DeCrosta could not even confirm the deal.)

buildingphoto2 Christopher DeCrosta Sees Apple, Tesla and J. Crew as Just the Beginning for Brooklyn
One Hanson Place.

As Apple is expanding in the borough, DeCrosta believes there are “special” spaces  planned for development that will attract other bigger retailers and brands because of the size and high-foot traffic of the neighborhoods. He counts Kushner Companies’ 85 Jay Street development site in DUMBO and RedSky Capital’s full block assemblage at Fulton Street, Flatbush Avenue Extension and DeKalb Avenue in Downtown Brooklyn among those.

One such space already existing that he foresees drawing a big brand, he is currently marketing. It’s the 40,000-square-foot retail portion of One Hanson Place, a converted residential condominium that is currently Brooklyn’s tallest building.

The retail base has three levels—the lower level, ground floor and mezzanine space—and DeCrosta and O’Donnell are targeting one user.

DeCrosta is hoping for a Nike, Samsung or Google. (If Google or Samsung took the space, it would be the first Brooklyn location for either; it would be Nike’s second.) It has 60-foot ceilings on the ground floor. And it has a vault on the lower level (the building was once the headquarters of the Williamsburgh Savings Bank.)

“When you walk into One Hanson Place,” DeCrosta said. “It’s an absolutely gorgeous landmarked interior. It’s a glaring hole in the market for a brand.”

Source: commercial