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Category ArchiveJohn Brod

Knotel Takes Full Floor at Beijing Shokai Group-Owned Chelsea Building

Office provider Knotel’s appetite for Manhattan commercial space continues unabated, with the startup having inked a 12,683-square-foot lease at 224 West 30th Street in Chelsea, Commercial Observer has learned.

Knotel signed a 10-year deal late last month for the entire fifth floor at the 14-story, roughly 143,000-square-foot building between Seventh and Eighth Avenues, according to sources with knowledge of the transaction.

Asking rent in the deal was $52 per square foot, sources said. James Caseley, John Brod and Alison Miller of ABS Partners Real Estate represented the landlord, a subsidiary of China-based real estate investment and development firm Beijing Capital Development Holding, also known as Beijing Shokai Group. Knotel was represented by Jessica Tu of CJ Net Inc. and Aziz Kabbaj of Mirador Real Estate.

While the lease commenced at the beginning of this month, Knotel expects to take occupancy of the space after completing a buildout of the offices. The company provides flexible, short-term office arrangements to mostly small- to mid-sized businesses—though it is increasingly serving larger corporations like Starbucks, which recently took a full floor at a Knotel location at 72 Madison Avenue in NoMad, as CO reported this month.

In a statement, Brod said Knotel’s buildout of its full-floor space will “reflect its brand.” He added that ABS has “been working closely with ownership to transform this building, which is presently comprised of fur showrooms, into a premiere office destination within the Penn Station/Hudson Yards corridor.”

A spokeswoman for Knotel confirmed the deal but did not immediately provide comment. Representatives for CJ Net and Mirador could not immediately be reached for comment.

Knotel has signed a flurry of office leases across New York City, and expanded into the San Francisco office market, since sealing a $25 million Series A funding round in February 2017. (Disclosure: Observer Capital, led by Observer Media Chairman and Publisher Joseph Meyer, is among Knotel’s investors).

The company claims it now has more than 700,000 square feet under lease across more than 40 locations in New York and San Francisco, expects to grow its total footprint to several million square feet before the end of the year and has plans for further expansion into global markets including London.

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

Investment Firm Takes 145 East 57th Street Penthouse

A private equity firm has snagged the newly constructed penthouse at ABS Partners Real Estate’s 145 East 57th Street, also known as the Hammacher Schlemmer building, Commercial Observer has learned.

Speyside Equity has inked a five-year deal for the 2,650-square-foot suite on the top floor of the 12-story, 64,000-square-foot office building between Third and Lexington Avenues, according to information from the landlord. Asking rent for the in Midtown East space was $80 a square foot.

The Ann Arbor, Mich.-based firm, which invests in metal, chemical and food manufacturing companies, will move from subleased office space in the Paramount Building at 1501 Broadway between West 43rd and 44th Streets. Its new home will have floor-to-ceiling glass windows looking out on 57th Street, 14-foot ceilings and a large private terrace.

Speyside Founder Kevin Daugherty said in prepared remarks that the new office would allow the company to “expand our team as we raise our next fund in the coming months.” He added, “We are excited about the space and feel it will really create an attractive and energetic environment for our team.”

The firm raised $130 million in 2016 for its first institutional fund, according to industry reports.

ABS’ John Brod, Robert Finkelstein and Alex Kaskel handled the transaction in-house. Speyside was represented by Town Commercial’s Nancy Shapiro. A spokeswoman for ABS didn’t immediately return a request for comment.

“It has pretty spectacular outdoor space for commercial,” Shapiro told CO. “It’s beautiful, it’s modern, it’s clean. It’s a very upscale space. They wanted something that would reflect more on the work they do, which is taking these struggling manufacturing businesses and putting them in a better state.”

ABS purchased the 64,000-square-foot, 1926 commercial property for $63 million in October 2016, according to property records. It renovated the building into boutique office space with six floors of prebuilt space, stainless steel appliances and a curated art display in the lobby.

Source: commercial