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Category ArchiveRetail

Wells Fargo Renews Flagship Branch Lease in Midtown East

Wells Fargo has renewed its lease for its long-time flagship location at 437 Madison Avenue, Commercial Observer can first report.

The bank signed a five-year renewal for its 7,206-square-foot space at the William Kaufman Organization building, which spans the blockfront between East 49th and East 50th Streets. The lease includes 4,328 square feet of retail space on the ground floor and 2,878 square feet for offices on the lower level. The asking rent was $500 per square foot for the ground-floor space, a WKO press release indicates.

Wells Fargo has been a tenant in the 40-story, 850,000-square-foot building since 2003.

Michael Lenchner of Sage Realty Corporation, the leasing and management division of WKO, represented the landlord in the deal. In a prepared statement, Lenchner touted the building’s “visibility, high foot traffic and the convenience of being in close proximity to Rockefeller Center and Grand Central Terminal.” CBRE’s Annette Healey represented Wells Fargo. A CBRE spokeswoman said the broker declined to comment.

In 2016, Sage Realty completed a $60 million building-wide redevelopment of the property, which includes a redesigned lobby and arcade area, a new plaza, renovated elevators, upgraded building systems and a 15th-floor “sky lounge” with outdoor conference rooms and sunrise yoga classes.

WKO owns the building with Travelers Companies (the former developed the property and Travelers has been a partner since 1994). Tenants include Mitchell Silberberg & Knupp, which signed a lease for more than 18,500 square feet last month, as well as Citizens Bank, Omnicom Group, Medallion Financial, Kekst and Company and Carnegie Corporation of New York.

Source: commercial

British Haute Couture Fashion House Ralph & Russo Opening First NYC Store on UES

Ralph & Russo, a British haute couture fashion house, is opening its first New York City store at 680 Madison Avenue on the Upper East Side.

The company yesterday leased 5,800 square feet of retail space at the base of the property between East 61st and East 62nd Streets, a spokesman for the landlord, Thor Equities, told Commercial Observer. The space comprised 2,300 square feet on the ground and 3,500 square feet on the second floor, he noted.

The deal is for 15 years with an asking rent of $1,500 per square foot on the ground, the spokesman said.

“This favored brand of royalty, Hollywood stars and A-listers is the ideal fit for 680 Madison Avenue, a premier retail building located on the city’s most upscale shopping corridor,” Joseph Sitt, the CEO of Thor Equities, said in prepared remarks.

Ralph & Russo’s new space will be a flagship, according to WWD, which broke the news of the lease.

Thor’s Sam Polese, Albert Dayan and Alexandra Frangos represented the landlord in-house in the deal. David Baker of Isaacs and Company represented the tenant. Baker didn’t immediately respond to a request for comment.

Luxury fashion designer Tom Ford occupies 12,300 square feet in the building for its flagship Manhattan store, luxury men’s brand Brioni is in 7,000 square feet and eyewear collection Morgenthal Frederics has 650 square feet. Art gallery Barrington Fine Arts occupies 4,000 square feet of the space that Ralph & Russo has leased and will relocate to 4,250 square feet within the building, the Thor spokesman said.

Thor bought the leasehold for the 35,526-square-foot retail condo on the first two floors of Extell Development’s luxury residential tower for $277 million in 2013, according to The Real Deal, and pays $3.5 million in annual ground rent. Last year, Thor secured a $310 million financing package for the property, comprising a $215 million senior loan from J.P. Morgan Chase, and a $95 million mezzanine piece, as CO reported in August 2017.

Source: commercial

Owners of ForGround Opening ‘High-End All-Day Café’ in Tribeca

The folks behind ForGround café in Midtown are opening a 1,234-square-foot ground-floor café at 112 Hudson Street in Tribeca, Commercial Observer has learned. An 832-square-foot basement space will be used for kitchen prep, storage and an office, according to Eastern Consolidated’s James Famularo who represented the landlord, Hudson Street Retail, with Eastern’s Clayton Traynham.

This will be “a first location from the same owner as ForGround, rather the a second ForGround location,” noted George Wlodarczyk of Douglas Elliman. Called Noted Tribeca, the new venue will be a “high-end all-day café and cocktail bar,” he said. Wlodarczyk along with Elliman’s Peter Gross represented the tenant in the deal.

ForGround is a café at 8 East 41st Street with ground coffee and a farm-to-table menu.

The asking rent in the 10-year deal was $150 per square foot, according to Famularo and the marketing materials for the property, which is between North Moore and Franklin Streets. The tenant will open in the next three or four months, Famularo said.

This is the second tenant the landlords’ brokers nailed down in the space within a six-month period.

“The space had sat empty since the new owners bought the retail condo from Robert De Niro five years ago, but within six months my team brought two tenants,” Famularo said in prepared remarks. He originally arranged a lease with Le Du’s Wines, but the wine shop’s relocation wasn’t approved by the New York State Liquor Authority last fall. The café deal was signed last Thursday.

Source: commercial

Kushner Leases Gallery Space for Jay Street Resi Project in Dumbo

Kushner Companies and partners CIM Group and LIVWRK will soon be opening a 4,0470-square-foot sales gallery for their residential project at 85 Jay Street between Front and York Streets in Dumbo, Brooklyn, Commercial Observer has learned.

The trio has leased ground-floor retail space at nearby 10 Jay Street, a 10-story, 250,000-square-foot former warehouse, via a four-year lease, according to Benjamin Stavrach, the director of leasing and property management at Triangle Assets, which owns the property with Glacier Global Partners. The asking rent, Stavrach said, was $150 per square foot.

The deal closed last Friday, and the tenants will be moving in “shortly,” said Stavrach, who represented the owners in the transaction. From the sales gallery, Kushner, CIM and LIVWRK will be able to showcase their upcoming 21-story residential project on the old Jehovah’s Witnesses site.

Triangle Assets bought 10 Jay Street between John Street and Brooklyn Bridge Park in 1991, bringing Glacier on board in 2014. The building, which is the only privately owned building in Brooklyn Bridge Park, will open in 30 days following a $70 million renovation, Stavrach said.The first floor is dedicated to retail and floors two through 10 are for offices. Office tenants include marketing agency Translation, which last September increased its space at the property to 46,000 square feet, and Nuxeo in 12,560 square feet, as per a previous CO story.

Raphael Schwartz of Kushner represented the tenants in-house. A spokeswoman for Kushner didn’t respond to a request for comment.

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

BFC Partners Bags Samsonite for Staten Island’s Empire Outlets

Luggage manufacturer and retailer Samsonite has signed a lease for space in  Empire Outlets, the outdoor shopping center that is under development on the North Shore of Staten Island, Commercial Observer has learned.

Samsonite has taken 1,924 square feet next to Banana Republic Factory, according to information provided by the developer, BFC Partners. The lease is for seven years, and the developer declined to provide the asking rent. (In April 2016, the asking rent was $125 per square foot, CO previously reported.)

“We’re very excited to be a part of this new outlet development in New York City,” John Mullins, a vice president and general manager of Samsonite Retail U.S., said in prepared remarks. “This unique shopping experience close to the Staten Island Ferry terminal should attract many tourists and locals that will make this project a success.”

James Prendamano of Casandra Properties brokered the deal for both sides.

“Samsonite has set the benchmark for excellence in their category,” Prendamano emailed CO. “Considering the droves of anticipated tourists to the center, we could not imagine a better fit to suit the travelers needs. Additionally, Staten Island as a whole, 500,000-people strong, yearns for access to brands currently not available on the island. It’s estimated 46 percent of SI shoppers leave the state to achieve their shopping goals. Empire Outlets [will] become a mainstay for not only tourists, but locals alike keeping those tax dollars and jobs in the local economy.”

BFC broke ground for Empire Outlets at 55 Richmond Terrace in April 2015, and upon completion it will be home to more than 100 designer outlet retailers. It is part of BFC’s $352 million, 1-million-square-foot development at the site, comprising a hotel and a 1,250-vehicle parking garage. Retail tenants include H&M, Nordstrom Rack, Gap Factory and Columbia Sporting Goods. Eateries signed on for Empire Outlet’s 40,000-square-foot food and beverage deck are Shake Shack, Artichoke Basille’s Pizza and MRKTPL, the borough’s first artisanal food hall.

Tenants will assume their spaces this spring with openings slated for the fall, an Empire Outlets spokesman said. The project’s opening was delayed to this March from Black Friday 2017, the Staten Island Advance noted, as BFC was trying to coordinate the timing with the opening of the adjacent New York Wheel. (That project has faced setbacks.) A BFC spokesman explained the most recent delay to the Advance this way: “In order to effectively manage the increased demand for the remaining space at Empire Outlets, and to ensure that all tenants, including our new prospects, benefit from a single grand opening, we are shifting the opening date to fall 2018.”

Source: commercial

LA Has Already Netted Millions in Permitting Fees From Legalized Marijuana Shops

The City of Los Angeles has already made more than $2.4 million from recreational marijuana companies who have obtained temporary permits to sell the drug, Curbed LA reported. And that figure is expected to grow to more than $3 million through this fiscal year, which ends in June, according to a representative from the city’s Department of Cannabis Regulation (DCR).

Since Jan. 3, just days after the legalization of recreational marijuana for adults 21 and older, went into effect under Proposition 64. In California, 112 businesses have received short-term licenses to sell in the city, according to Curbed LA. Less than half have also obtained a separate state license needed to actually start selling the drug. (The DCR will issue permits in three phrases, starting with temporary approvals that give qualified applicants to continue operating with limited-immunity until the final license is awarded.)

All told, 47 businesses are now licensed by both the city and state to sell marijuana for recreational use in L.A.

Cat Packer, the head of the city’s cannabis regulation department, told a Los Angeles City Council Committee on Feb. 16 that her office had taken in far more revenue than was anticipated.

“Originally the department was given a budget of $1.3 million, and to date we have collected over $2.2 million in licensing fees, and we have around about $800,000 in outstanding invoices, so it is likely that our revenue projections through June will be $3.5 million,” Packer told the Rules, Elections and Intergovernmental Relations Committee, as per published reports. (Parker did not return a call for comment as of press time.).

In response to the overwhelming number of applications, Parker’s department was given the go-ahead last week to add 18 new positions to its current three-member staff, according to a cannabis department employee.

The number of pot shops that will eventually be allowed to operate within the city will be limited by land use requirements on where they’re allowed to operate (for instance, stores can’t open within 700 feet of schools, public parks or drug treatment centers). According to the planning department, these restrictions will effectively limit the number of storefronts carrying recreational marijuana to 390 citywide.

The sale of recreational marijuana is projected to far eclipse its medical marijuana counterpart, which has been legal in California for two decades—accounting for roughly $2 billion in annual sales, as the Los Angeles Times reported.

California voters approved the legalization of recreational marijuana in 2016, effective this January. In March 2017, Los Angeles voters approved Measure M, which set up regulatory  and taxation guidelines for the cannabis industry, which city officials estimated could generate more than $100 million in tax revenue annually, according to the LA Daily News.

Business taxes won’t be fully collected until this July, but that money, along with funds brought in through the application fees will add to the city’s general fund.

For individual buyers, the state collects a 15 percent excise tax on recreational cannabis sales, while the City of Los Angeles has imposed a separate 10 percent business tax on top of the countywide 9.5 percent sales tax. Sales of medical cannabis to those who have a medical marijuana identification card and a valid government-issued identification card will be exempt from sales and use tax.

Source: commercial

T.J. Maxx Grows on West 57th Street

T.J. Maxx is expanding on West 57th Street near Columbus Circle.

The discount retailer extended its lease at 250 West 57th Street and added 19,000 square feet on the fourth floor, Empire State Realty Trust revealed in its first-quarter report published yesterday, bringing its square footage in the building to 47,000. T.J. Maxx will pay $1.9 million annually, or $40 a square foot, according to the report. The retail chain extended its lease for another 12 years and has been in the building since 2010, an ESRT spokeswoman told Commercial Observer.

Joanne Podell and Mary Clayton of Cushman & Wakefield represented ESRT, along with Fred Posniak and Shanae Ursini in-house. Peter Ripka, Andrew Mandell and Richard Skulnik of Ripco Real Estate handled the deal on behalf of T.J. Maxx. Spokespeople for both brokerages didn’t immediately respond to requests for comment.

The Real Deal was the first to write about the lease.

The real estate investment trust has done a brisk leasing business recently at the building on West 57th Street between Broadway and Eighth Avenue. Music management firm RZO inked a deal last week to consolidate its space in the building and move to 12,600 square feet on the entire 23rd floor, CO reported. The American Society for Composers, Authors and Publishers took 85,400 square feet there last October, and Universal Music Group leased a full floor there in November.  

Source: commercial

Food Market Signs on at Lighthouse Point in Staten Island

A fresh food market is coming to Triangle Equities’ sprawling, mixed-use Lighthouse Point project next to the St. George Ferry Terminal on Staten Island, Commercial Observer has learned.

Lighthouse Point Market inked a 15-year lease for 7,000 square feet at the base of a 12-story, 116-unit residential building at 35A Bay Street, according to a press release from the developer. It will join Spaces, a coworking outfit owned by IWG Plc (formerly known as Regus), which signed on for 30,000 square feet of the building’s 65,000-square-foot commercial portion. The market will open in the fall of 2018 with a selection of produce and prepared foods. The operator, Sam Choi, also owns Cafe Manhattan, a grab-and-go food spot and buffet at 35 West 45th Street. A spokeswoman for the developer didn’t disclose the asking rent.

Phase 1 of the $250 million development includes the mixed-use building—where 20 percent of the units will rent for below-market rates—as well as an acre of public waterfront green space and a 300-space parking garage.

In the second phase of construction, Triangle will revamp 19th century Greek Revival buildings once used by the Coast Guard into 30,000 square feet of restaurant, office and entertainment space. A 12-story, 175-room Westin Hotel will rise next door and feature 15,000 square feet of banquet and meeting rooms. Work on Phase 1 is expected to wrap this summer, and construction on Phase 2 will start in the fall and finish in the spring of 2020.

Peter Botsaris of Botsaris Morris Realty Group represented Triangle Equities in the deal and did not immediately return a request for comment. The tenant did not have a broker.

The developer touted the fact that it was bringing a new grocery option to St. George, where the only major grocer is a Key Food a couple blocks away on Bay Street, near the border with Tompkinsville. While traditional grocery stores have been declining in some parts of New York City, as CO recently reported, areas like the North Shore of Staten Island are clamoring for fresh produce options because they’ve long struggled to attract quality supermarkets.

“As with all of our developments, it’s Triangle’s mission to deliver value for the communities in which it invests, and in St. George creating access to healthy food options in an underserved area is an aspect of accomplishing that goal,” said Lester Petracca, the president of Triangle Equities, in prepared remarks. “This urban market at Lighthouse Point will fill a void in the area, along with many other enhancements the project will bring to the North Shore of Staten Island.”

Source: commercial

Kendra Scott Is Opening a NYC Store, in Soho

Kendra Scott will be opening a Soho store to showcase its jewelry, home decor and beauty products, Commercial Observer has learned. It marks the company’s entree into the New York City market after opening more than 70 locations nationwide.

The design company, founded by Kendra Scott in 2002 out of her spare bedroom, has nailed down 2,500 square feet at 126 Spring Street, at the corner of Greene Street.

Kendra Scott signed a 10-year lease (with options) and will take occupancy by the third quarter, according to a spokeswoman for the tenant’s broker at Newmark Knight Frank. The asking rent was $1,000 per square foot, although technically there wasn’t one as the space was originally being offered as a sublease with Swedish apparel brand J. Lindberg, the spokeswoman said. In the end, Kendra Scott did a deal direct with the owner, CJ Tan Spring LLC.

Of the leased space—all of which is for selling—half is on the ground floor and half is below grade.

“While other submarkets may dwindle in popularity, Soho will always be sought after by brands who seek that elusive mix of heavy pedestrian traffic, increased brand awareness and tremendous sales potential,” NKF’s Matthew Krell, who represented Kendra Scott, said in a statement.

The landlord’s broker, Jordan Barker of Bark Equities, told CO: “This is the best corner in Soho. [Kendra Scott] needed 2,000 square feet of selling space. This was the only opportunity [for 2,000-plus square feet of selling space] in Soho.” He added that the deal “tells the story that Soho really isn’t dead—it just takes a new type of retailer to be successful.”

That type of retailer?

“People that have a following and know how to generate traffic,” Barker noted. And “obviously it all comes down to a quality product.”

Other tenants in the two-story, 27,600-square-foot retail building include Longchamp with retail at the base and offices and a showroom upstairs, a Molton Brown store and a 1,000-square-foot vacant space that was until recently occupied by Vosges Haut-Chocolat, Barker said.

Source: commercial