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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

Levi’s Zips Up New Times Square Space

Levi’s is moving its Times Square store a block and a half north up Broadway, according to an investor presentation from Vornado Realty Trust.

The denim company will occupy 17,250 square feet on the lower level and ground floor of the Vornado’s Marriott Marquis at 1535 Broadway, between West 45th and West 46th Streets, according to information from CoStar Group. The store is expected to open at the end of 2018, The New York Post reported. The length of the lease and asking rent weren’t disclosed.

Levi’s currently occupies 600 square feet on the first floor of the Paramount Building at 1501 Broadway, between West 43rd and West 44th Streets, according CoStar.

Laura Pomerantz of Cushman & Wakefield repped Levi’s in the transaction, and a spokesman for the brokerage didn’t return a request for comment. A Vornado spokesman declined to say who was involved in the lease, but the in-house leasing team for the building consists of Edward Hogan, Jason Morrison and Michael Worthman.

Laline and T-Mobile already occupy retail space in the building and Sephora has also leased space there.

Source: commercial

Vornado Talks Up Moynihan Train Hall for Amazon HQ2

Vornado Realty Trust’s redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall is “front and center” in New York City’s bid to house Amazon’s new HQ2 headquarters, Vornado said on its third-quarter earnings call today.

Vornado, which is redeveloping the former post office building with partners Related Companies and Skanska, cited the project’s 730,000 square feet of office space and 120,000 square feet of retail offerings as key facets of its pitch to host Amazon—which has sent municipalities across the country into a sweepstakes to host the Seattle-based e-commerce giant’s second headquarters complex.

Steven Roth, Vornado’s chairman and chief executive officer, said the company was “pleased” to see Manhattan’s West Side included in the New York City Economic Development Corporation’s proposal to Amazon as one of four city neighborhoods that could accommodate HQ2 (the other three being Lower Manhattan, Downtown Brooklyn and Long Island City), with the city touting the area’s robust transit offerings and ample office space in the Hudson Yards, Penn Plaza and Midtown West areas.

Roth noted that Moynihan Train Hall would be able to meet Amazon’s “near-term needs” for roughly 500,000 square feet of office space—though whether it would be able to provide that space by next year, as indicated by Amazon, is uncertain given the Moynihan project’s 2020 targeted completion date. (Amazon will eventually require up to 8 million square feet of office space for HQ2.)

But Roth and other Vornado executives noted that the project’s large, 250,000-square-foot office floor plates would be “extraordinarily attractive” to a company used to the sprawling, campus-like headquarters occupied by many major West Coast-based tech conglomerates.

They noted how Vornado’s senior management team visited Silicon Valley this past summer “to understand the nature of what these campuses are”—citing Facebook’s Frank Gehry-designed, roughly 10-acre headquarters as a “one-story building [with a] 450,000-square-foot footprint,” as well as the 820,000-square-foot floor plates at Apple’s headquarters. Both facilities also feature sizable outdoor, park-like amenities.

Moynihan Train Hall, they said on the call, is “truly unique” in its “ability to deliver a horizontal campus in New York, with great roof deck space in the heart of the city with views all around.”

But Roth added that regardless of “whether New York wins the HQ2 race or not, Amazon will have a long-term significant presence” in the West Side “for years to come,” with the company having committed to large blocks of space at Vornado’s 7 West 34th Street as well as Brookfield Property Partners’ Manhattan West development.

On a broader scale, Vornado reported a bullish outlook for its core New York City office and retail assets. It cited more than 450,000 square feet of office leases across 33 separate transactions signed at “record-breaking” average starting rents of $83 per square foot, as well as 97 percent occupancy across its city office portfolio.

Roth described demand for New York City office space as “robust” and coming from a diverse cross-section of industries. David Greenbaum, the real estate investment trust’s New York division president, noted that office-using employment in the city remains strong and will be able to “absorb the new supply coming online in the next five years,” with the financial services sector having “finally reached its pre-financial crisis level” of employment in the third quarter.

Greenbaum said Vornado has a “negligible amount” of office lease expirations planned over the remainder of the year, with the REIT’s 1 Penn Plaza comprising “over a third of our lease expirations over the next two years.” The company is currently “finalizing our plans” for an ambitious repositioning of the office tower, which Greenbaum said is expected to commence next summer.

Roth also discussed 666 Fifth Avenue in Midtown, which Vornado co-owns with Kushner Companies and which has drawn much attention this year due to the property’s uncertain financial future (as well as its ties to former Kushner Companies head and now-Trump administration senior adviser Jared Kushner).

The building, while located on a “very attractive piece of real estate,” is “over-leveraged,” Roth said, acknowledging rumors “about tearing the building down and doing all manner of fairly grand development schemes.” But he labeled such ambitious plans as likely “not feasible,” adding that the property will probably remain in its current state as an office building via capital improvement plans that he described as “a work in process.”

Vornado also leased around 38,000 square feet of retail space across its Manhattan portfolio in the third quarter, with the most notable deal being Sephora’s 16,000-square-foot relocation to 1535 Broadway in Times Square. Greenbaum said the company is also in talks “for another flagship lease, with a major national retailer, for the remaining 12,000 square feet” of retail space at the property’s base.

“Our upper Fifth Avenue and Times Square [retail] assets are buttoned up for term with great credit tenants,” Roth said, noting that the company has only one lease expiry in its Manhattan high street retail portfolio coming in the next five years—fashion retailer Massimo Dutti’s location at 689 Fifth Avenue, which is due to expire in 2019 “at below market rent.”

Vornado has also identified roughly $1 billion in assets that it plans to sell in the coming years, excluding residential condominium sales at its 220 Central Park South tower in Midtown, Roth said.

The 75-year-old Roth also acknowledged that he had heart bypass surgery in August—a procedure that raised questions about the publicly traded company’s future leadership and succession plan.

But the Vornado head attempted to dispel concerns about his health and the company’s leadership, saying that he is “now better than new, and back to work.”

Source: commercial

Lululemon Seals Deal at Scribner Building

Lululemon Athletica has signed a one-year lease for 12,865 square feet at Thor EquitiesScribner Building near Rockefeller Center, Commercial Observer has learned, with an option for a long-term deal.

Bloomberg reported on May 22 that the active-wear maker was in “advanced talks” for the space at 597 Fifth Avenue between East 48th and East 49th Streets, previously occupied by Sephora. As of today, that deal has been sealed, sources told CO.

The selling portion is 8,862 square feet spanning the ground floor (4,806 square feet), balcony (2,214 square feet) and mezzanine (1,842 square feet), a source in the know said, plus Lululemon has 4,003 square feet in the basement for back-of-house functions. The rent is roughly $400,000 per month, the source said. Another person close to the situation said the store will open in late July.

Thor declined to comment via a spokesman. A spokeswoman for Lululemon declined to comment because the company is releasing its latest earnings report on Thursday. RKF‘s Jeremy Ezra and Karen Bellantoni represented Lululemon in the deal and Ezra declined to comment.

The 12-story 1913 building was originally built to house Scribner’s Bookstore. Upstairs are office tenants like ValuePenguin, a personal finance company that took the entire fifth floor, as CO reported last October, as well as Bateleur Capital and GCT Constructors.

Source: commercial

What Retail Meltdown?

New York City is defying the downturn. Despite all the handwringing, Gotham’s favorite corridors are still attracting fabulous brands. Even newbies like Billionaire’s Row are welcoming an exciting line-up of shops. The phenomenon goes up and down Manhattan. Online and brick-and-mortar are working together, many pop-ups are testing the waters, and major holes are now being filled. Forget those doomsday prophecies: Retail in our chic city is here to stay.

Of course, every broker says this. Don’t just take my word for it. Let’s examine the relevant neighborhoods, one by one.

 Herald Square. Herald Square is moving in the right direction with retailers jostling for the prime spaces as the biggest brands in retail move in. Target has taken a megastore at 112 West 34th Street, opening in October, joining Sephora and Foot Locker, directly across from Macy’s. (When Macy’s announced that it was closing stores last year, the Herald Square flagship was notably spared.) Sephora recently moved from a few doors down, showcasing their latest retail concept Beauty T.I.P. Workshop, a technology lover’s temple to all things beauty. Amazon Books continues to roll out its bricks-and-mortar stores, opening this summer at 7 W. 34th Street, in addition to their location set to open at The Shops at Columbus Circle this Spring.

Fifth Avenue. New York’s ritzy thoroughfare is embracing “shop-in-shops” plus a surge of beauty brands, jewelry and watches. Lord & Taylor has debuted the Dress Address with the city’s largest dress selection ever. The newly relocated Sephora is a visionary concept at 580 Fifth Avenue. French apothecary brand L’Officine Universelle Buly is reconnecting to its art deco roots with a shop-in-shop at Bergdorf Goodman. Boutique Cartier NYC Central Park has decided to stay on permanently. Tag Heuer joins the Avenue alongside Coach House and Stuart Weitzman at 685 Fifth Avenue.

Madison Avenue. Elie Saab’s boutique is now open at 860 Madison Avenue while Balenciaga is soon to debut at 840 Madison Avenue. Robert Clergerie Paris is building their new flagship store at 901 Madison Avenue. Meanwhile, the Louis Vuitton-Jeff Koons creative collaboration is located, for the coming weeks, at 655 Madison Avenue. 

Billionaires’ Row. On East 57th Street, a prominent Park Avenue corner that has been vacant for six years is coming back to life with the arrival of London-based men’s clothier Richard James at 465 Park Avenue. Swiss watchmaker Richard Mille will finally have its East Coast boutique at 46 East 57th Street, the retail side of 432 Park Avenue, the single tallest residential building in the western hemisphere.

Hudson SquareDowntown shouldn’t get lost in the pack. In Hudson Square, the home furnishings sector is going strong, combining clicks with bricks for an even greater impact. Bed Bath & Beyond and its born-online design subsidiary, One Kings Lane, have signed on Hudson Street.

Pop-ups continue to test the market at the same time, with established designers are trying new corridors. The Upper East Side has seen Doob at 980 Lexington Avenue and Bandier at 150 East 72nd Street; Nora Gardner popped up in Midtown South at 13 West 38th Street; Flatiron got Gwynnie Bee at 134 Fifth Avenue; and the West Village saw Sunni Spencer at 371 Bleecker Street. Soho got Daniel Wellington at 444 Broome Street and the Vintage Twin at 543 Broadway; French brand 13 Bonaparte is launching a pop-up shop on Rivington Street in the Lower East Side to test the U.S. market before its permanent opening in Los Angeles.

Retail is resilient, and New York City is where shopping always shines. Never mind the headlines that paint everything in dour tones; it’s the bright colors of window displays, dazzling new awnings and products that we need to touch, feel and experience that matter. More stores, more brands, higher quality and better service continue to redefine retail. Add the melding of online and off and so many choices from our seasonal pop-ups, and New York City shopping will always have something for everyone. Happy Shopping!

Source: commercial