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Category ArchiveFaith Hope Consolo

Morton Williams Taking Old Talbots Space on UES

Supermarket chain Morton Williams has signed a 30-year lease at 1251 Third Avenue on the Upper East Side for its 17th grocery store.

The family-owned supermarket company, which has been around since the 1950s, will occupy 13,000 square feet amassing the entire ground floor and lower level of the building between East 72nd and East 73rd Streets, owners of the supermarket confirmed to Commercial Observer. The space was formerly home to sportswear store Talbots, which vacated the space two years ago. The asking rent in the transaction was just under $2 million per year.

“We have a number of stores on the Upper East Side already, so we understand consumer needs and we are able to cater to them effectively,” Avi Kaner, a co-owner of Morton Williams, told CO. “This Third Avenue corridor is one we have been looking at for a while, because of its residential density.”

Morton Williams’ newest location at 1251 Third Avenue will be just a few blocks over from an existing store at 1331 First Avenue between East 71st and East 72nd Streets.

The company doesn’t appear to be concerned about the two stores cannibalizing each other.

This Third Avenue “location is ideally situated to provide services to customers coming from the west—from Park Avenue and Madison Avenue—as well as the North,” Kaner said. “We already have a store on 72nd [Street] and First  [Avenue], which caters to customers from the east.”

Construction has begun on the new supermarket, which is expected to open in October. The New York Post was first to report news of the deal.

Perry Rothenberg of Creative Leasing Concepts represented Morton Williams. Douglas Elliman’s Faith Hope Consolo handled the deal for the landlord, 203 East 72nd Street Corp. Consolo did not immediately return a request for comment.

Traditional supermarkets had been getting squeezed by specialty stores and ecommerce, as CO previously reported, but Morton Williams seems to be unaffected and is steadily growing.

Morton Williams currently has 12 supermarket locations in Manhattan, two in the Bronx and one in Jersey City, N.J. It also signed a 29,400-square-foot lease for space at One West End Avenue on the Upper West Side last December, as CO previously reported, for its 16th store. Construction is about to begin on that location.

Source: commercial

Retail Details: The Dollars & Scents of Giving a Store an Aroma

Back in the day, “fragrance branding” or “scent branding” started in casinos and hotels as a way to combat the smell of cigarettes and cigars that was more or less everywhere, according to Scenterprises’ Sue Phillips. But while smoking has certainly gotten less ubiquitous over the years, designing a scent for a hotel or a retail space has gone the opposite way.

In the swimwear department of big retailers like Bloomingdales, the smell of coconut gently envelopes the customers so they’ll already envision themselves on vacation, as Douglas Elliman’s Faith Hope Consolo told Commercial Observer. Basking in the comforting smells, customers linger, return and spend.

But we should let these two pros explain why giving a store its own unique aroma has become more in demand, and why it can keep shoppers in stores longer.

Source: commercial

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
SUITING UP: EUROPEAN WOMEN’S STORE SUITSTUDIO HAS FARED WELL IN BROOKFIELD PLACE SINCE OPENING LAST NOVEMBER. Photo: Brookfield Property Partners

“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

Barneys Shuttering Upper West Side Store After More Than a Decade

Barneys New York is closing its Upper West Side store store on Feb. 18, a company spokeswoman confirmed to Commercial Observer.

“Barneys New York has enjoyed serving the community on the Upper West Side for over a decade. We sincerely appreciate the loyalty of our customers, and we look forward to continuing to serve them at our Madison, Downtown and Brooklyn locations,” the spokeswoman emailed.

West Side Rag first reported the news on Feb. 2 based on information provided by a manager.

The roughly 10,000-square-foot clothing store, which is on the ground and lower levels at 2151 Broadway between West 75th and West 76th Streets, opened in 2004, according to retail broker Faith Hope Consolo of Douglas Elliman Real Estate, who represented the landlord in the original lease negotiations with Barneys. The space underwent a renovation in July 2013, which included rebranding it from a Co-op store—selling lower-price fashion—to a Barneys New York. (The company has converted Co-ops stores to Barneys New York shops.) The lease is slated to expire at the end of 2023, according to CoStar Group.

Once it shutters, there will be two remaining Barneys stores in Manhattan: one at 660 Madison Avenue between East 60th and East 61st Streets and one at 101 Seventh Avenue between West 16th and West 17th Streets.

“This is a big loss for the Upper West Side,” Consolo said. The deal was unique at the time as most retailers were focused on Columbus Avenue, but Barneys took a Broadway space.

Broker John Brod, a partner at ABS Partners Real Estate, said the news is of no surprise.

“Customers can go on line at Bonobos, UNTUCKit, Allbirds, Amazon, Suitsupply and manufacturers’ own online e-commerce store to purchase the same merchandise so the need for Barneys to have a brick-and-mortar presence has past,” Brod emailed. “Specifically, Barneys is a multi-brand retailer and as such the need for a second store in a secondary market becomes redundant in today’s retail and shopping environment. The issues are further challenged by the general state of retail in this area—note that Sephora has opted to downsize from their 2162 Broadway location—they passed on their right to renew. Moreover, Anthropology who was negotiating to replace Sephora here after many months of negotiation, decided not to proceed. Additionally Eastern Mountain Sports vacated this area [at 2152 Broadway] as well. The fact is there is a very limited demand for large flagships in both primary and secondary markets. Clearly the Upper West Side is a secondary market.”

The market and neighborhood combined to hurt Barneys.

“Barneys closing is a reflection of the current market,” said SCG Retail Partner David Firestein. “With that said, they were never right for the neighborhood, in the mid 70s. A better fit would have been closer to Lincoln Center, near Century 21.”

And the popularity of online food shopping has impacted the area, including Barneys.

“That stretch of Broadway has always been local, and much of its traffic from shoppers that live or work outside the market area was based on the food anchors—Citerella, Fairway and Zabars—all on the west side of Broadway in a seven-block stretch,” said Robin Abrams, a vice president at Eastern Consolidated. “Once it became possible to get fresh produce and a wide array of prepared foods at the various Whole Foods [stores], Fairway’s other locations and a variety of other competitors, the pedestrian traffic on Broadway diminished. Now the retailers on Broadway must be strong to cater to local traffic, and even stronger if they are to pull from a broader customer base.”

Source: commercial

Super Fi Emporium Opening Second East Harlem Supermarket

Super Fi Emporium is opening its second full-service supermarket in East Harlem, Commercial Observer has learned, after spending $10 million on a commercial unit yesterday.

The new market will span the entire 12,750 square feet of ground-floor retail space at HAP Investment’s new 2211 Third Avenue at the corner of East 121st Street. The market is participating in the city’s Food Retail Expansion to Support Health, or FRESH, program that provides savings to owners and increases the availability of affordable, healthy food options in areas of high need.

“We are thrilled to be the retail tenant at 2211 Third Avenue,” Anthony Reynoso, one of the owners of SuperFi Emporium, said in a statement. “2211 Third Avenue is a great addition to the area, and we look forward to being the go-to supermarket for the tenant community as well as the rest of the East Harlem neighborhood.”

Super Fi has a location 1635 Lexington Avenue between East 103rd and East 104th Streets which it reopened in June 2013, also via the FRESH program.

Douglas Elliman Faith Hope Consolo and Arthur Maglio represented both sides in the deal, and is working on another deal for Super Fi Emporium in Harlem. “They believe in Harlem,” Consolo said. “For East Harlem, this is a nice push. Harlem needs the same options in food that is all over the city.” The new market will open in spring 2018.

HAP hosted a ribbon cutting and opening ceremony for the completion of the 108-unit building, known as Hap Ten, on Nov. 7. It was designed by Fischer + Makooi Architects.

“With the addition of SuperFi Emporium, we are certain the building will be the most sought after rental destination in East Harlem,” Eran Polack, the chief executive officer of HAP Investments, said in a prepared statement.

Monthly residential rents at 2211 Third Avenue range from $2,100 for a studio to $3,750 for a two-bedroom, according to information provided by HAP. The building features doormen, elevator, fitness center, roof-deck, terraces, private storage, bike room, on-site parking and in-unit washers/dryers.

“This is a win-win for Harlem and it’s a win-win for [Super Fi],” Consolo said. “And it’s a wonderful amenity for the building.”

HAP Investments acquired 2211 Third Avenue, 214 East 121st Street and 216 East 121st Street from Tahl-Propp Equities in May 2014 for $13 million, according to property records.


Source: commercial

ICSC ’17: Hot Takes From Retail Experts

Retail pooh-bahs get straight to the nitty gritty about the state of retail with Commercial Observer at this year’s International Council of Shopping Center‘s RECon event in Las Vegas last month.


Source: commercial

ICSC ’17: The Experts Weigh In

What are the retailers that are going to survive this new retail apocalypse? (Short answer: Food.) What are the big concerns in the retail market? What could a savvy brand do to compete?

These are the questions that Commercial Observer asked a gaggle of retail pros at ICSC this week, including everyone from Appear Here’s Ross Bailey (starting at the 43 second mark) to Geoff Bailey of SCG (0:34), to C. Bradley Mendelson of Colliers (1:49), to Jason Pruger of Newmark Knight Frank (3:37).

The answers were interesting. Meridian’s David Schechtman believes that the space is as much a factor as whatever brand is being hocked in the store. (Starting at the 1:01 mark.) Adaptation is a big issue (see Jedd Nero of Avison Young at the 1:34 mark.) As is the general dreariness and inertia in the air (Cushman & Wakefield’s Joanne Podell has some thoughts on this at the 2:08 mark, along with Schechtman.) And David Rabinov of Ackman-Ziff has concerns about the market becoming over-leveraged (2:15)

The answers to a lot of these problems are what one might expect. Faith Hope Consolo of Douglas Elliman’s advice: Do everything. (4:08) Embrace digital, says RKF’s Robert Futterman (4:23) and step up every aspect of your game. Be more experiential. But don’t take our word for it. Watch!


Source: commercial