With the unforgiving polar vortex behind us, and consistent upticks in consumer demand dispelling market anxieties stemming from the Fed’s tapering policies, there is only one direction retail is heading. Up! The consumer is back, and retail is king. Come hear about it from the industry leaders themselves at Bisnow’s 4th Annual NY Retail Summit. [...]
With the unforgiving polar vortex behind us, and consistent upticks in consumer demand dispelling market anxieties stemming from the Fed’s tapering policies, there is only one direction retail is heading. Up! The consumer is back, and retail is king. Come hear about it from the industry leaders themselves at Bisnow’s 4th Annual NY Retail Summit.
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Earlier this week, The Jones Group announced a series of actions that will be taken in the hopes of improving profitability. The fashion company, which owns Jones New York, Nine West, and Anne Klein, will close approximately 170 stores and cut 8% of its workforce. After the cuts were announced, shares of the company rose 2.7& to $13.97 on the New York Stock Exchange.
Earlier this year, activist hedge fund Barington Capital Group met with Jones Group management and suggested the company cut expenses and focus on its most successful brands, while possibly selling other brands. Last year, sales during the holiday season fell about seven percent, indicating just how much the company is struggling to face aggressive competition.
The retailer hopes that by mid-2014, these actions will generate approximately $40 million in annual pretax savings. In a statement, the company said that the plan will result in costs of $40 million to $60 million in the next 15 months. The restructuring is already underway, with 50 stores announced in Q4 of 2012. Domestic retail staff will be reduced by approximately 18%, and corporate, support, and supply chain staff by 2%, which will take the total reduction to 8%—about 850 jobs—upon completion. The staff reductions and terminations notifications began April 1, and will continue through the first half of 2014.
The Bronx has been making significant strides in the retail market. While the Bronx was previously shadowed by Manhattan and the other boroughs as far as retail goes, residents and businesses are working to change that. Equity One Inc. is a real estate investment trust, and they own 144 retail centers. They started work and construction on a multilevel, 135,000 square foot shopping center in the Kingsbridge area, expected to open in the fall of 2014.
Another development is going on in the neighborhood, just eight blocks north. Metropolitan Realty Associates and Angelo Gordon & Co. are building a shopping center, including 162,000 square feet, called Riverdale Crossing shopping center.
“We think these two projects are going to really bookend the Kingsbridge district, and there will be a lot going on down there,” said John DeSio, a spokesman for Bronx borough president Ruben Diaz Jr.
In 2012, Equity One received permission from the city to purchase and build on the 80,000 square foot lot on 230th Street and Broadway. They predict that construction here for a shopping center will cost about $50 million. They are using their own capital to finance the project. This is a reflection of their confidence in the neighborhood to succeed and have a strong future. The face of retail in the Bronx is really changing. Where it used to consist predominantly of small retailers located mostly at the base of apartment or office buildings, lately it has been really emerging into larger projects with nationally known stores. “The Bronx now is being repositioned for a much more dynamic retail environment. It’s not just local shops. It’s now national and international retail,” explained Faith Hope Consolo of Douglas Elliman Real Estate.
Safeway shares dropped substantially Thursday morning as the company reported $10 billion in sales for Q1 in 2013 ended March 23. That figure is essentially flat compared to the same period in 2012. Analysts had expected comparable sales upward of 2%, which would have made quarterly sales higher than $10.2 billion.
Upon seeing the figures, Wall Street reacted swiftly, and Safeway shares were selling down more than 17% to $23.40. Despite the drop, the company’s stock is still up more than 10% over the past year.
Safeway’s same-store sales were impacted positively by 40 basis points on account of a fiscal calendar shift, and were impacted negatively by 90 basis points because of a shift to generic drugs, according to Safeway Chairman and CEO Steve Burd.
Safeway’s guidance for 2013 remains unchanged at $2.25 to $2.45 earnings per diluted share, but that does not include any sales bumps out of the company’s wellness program, which should launch in the next three months.
Spring has arrived and more and more people are traveling to their favorite golf club to participate in a sport which I have never been able to excel. While, yours truly does not enjoy the victory of sinking a putt, thousands of individuals from the metropolitan area are searching for new venues to practice their skills.
In order to gain expertise in this sport, I have been advised that one must secure clubs, shoes, apparel and other accessories to master this game. While Manhattan does not have actual club on the island, a number of new golf retailers are scheduled to open new venues in Midtown.
Golfsmith is the nation’s largest specialty golf retailer with more than 85 stores has a total of 11 retail shops in the metropolitan region. Construction is currently underway for its Fifth Avenue location at 420 Fifth Avenue, on a portion of the ground floor and the entire second floor of retail space which previously served as the home of Comp USA.
Simon Property Group has started its development of Fairfield Town Center in the Houston area. The 550,000-square-foot complex is slated for completion in late 2014 or early 2015.
Edge Realty Partners will manage the development, and says that the completed center will consist of over a dozen pad sites, several retail and dining options, and a 12-acre multi-family housing development.
Specifics about future tenants have not been released yet, but Simon Property Group has spoken with several restaurants, both sit down and fast food, as well as retailers and at least two banking concepts to open branches in the development by summer 2013.
Plans for the center were presented as early as 2007, but a struggling economy and lack of tenant demand caused delays in the project. Luckily, with the economy gradually improving, demand from both local and national retailers is on the rise.
Vornado recently completed a $203 million retail sale for the Plant, a power strip shopping center in San Jose, California. The buyer has been reported as part of a division of Cole Real Estate Investments, and it was initially estimated that the deal would cost $205 million.
Vornado also recently purchased a retail property in Philadelphia for $60 million as part of The Gallery at Market East. Vornado came out with net proceeds from these 2 deals of about $156 million.
The Plant retail development is located on Curtner Avenue and Monterey Road, consists of 650,000 square feet, and occupies a 55-acre site that used to be a General Electric plant. Big retailers at the Plant include Target, The Home Depot, Best Buy, Ross, and many others!
The San Jose area has been receiving huge interest as investors look into a lot of different development opportunities in the area.
Steve Rappaport, Senior Managing Director at Sinvin Real Estate, is a commercial real estate broker in Manhattan, specializing in retail and restaurant leasing. Steve represents both tenants and landlords. Since joining Sinvin in 2006, Steve quickly became one of the top producers at this preeminent downtown commercial brokerage. His extensive knowledge of the city and [...]
Since launching in 2010, eyewear startup Warby Parker has partnered with boutiques to open small pop-up showrooms where customers can try on their glasses. This month, the predominantly online retailer officially announced its first flagship location at 121 Greene Street in SoHo. The 2,000-square-foot space is technically not the company’s first store—a space in the Meatpacking District was meant to be a pop-up shop, but was so well received that it is sticking around—but it is the most ambitious effort.
Warby Parker closed a $41.5 million investment at the end of February, led in part by J. Crew CEO Millard S. Drexler and American Express, as well as a host of VCs. With this backing from the retail world, the company is beginning to experiment more aggressively with its offline push.
Interestingly, the flagship, which shares inventory with the website, aims to combine the physical and sensory aspects of a library with the same efficiency of the online store. Hidden sensors around the store track how customers use the retail space, mirroring the kind of online analytics that measure how visitors interact with a website. In partnership with analytics startup Nomi, Warby Parker plans to marry information collected in-store with online data trails to create a unified view of their customers, both online and offline, and to deliver a seamless omni-channel experience.
On Wednesday, April 17th, Massey Knakal CRE Investment Summit invited investors, owners, developers, financiers, and other principals and deal makers to their conference. The conference will be held at the McGraw-Hill Conference Center at 1221 Avenue of the Americas in NYC. The event will focus on acquisition, disposition, financing, and development of Commercial Real Estate properties in the Tri-State area. Included in the event is a networking breakfast, lunch, and a cocktail reception for great networking opportunities. There are about 40 confirmed speakers coming to the event from the most renowned real estate companies, including KIMCO, Boston Properties, Massey Knakal, The Shopping Center Group, Crown Acquisitions, and many more! With hundreds of attendees, it will be an important event to mingle and meet potential clients and partners. CLICK HERE to register!
New York City is the home of hundreds of fabulous retail stores from around the world. While we have a Nordstrom Rack in Union Square, construction has not begun for the planned 285,000 square foot, seven stories Nordstrom that will open at Broadway and West 57th Street, near Columbus Circle. Until the store opens in a few years, residents and visitors from around the world lack the presence of the nation’s favorite fashion retail chain, according to an annual consumer study conducted by Market Force Information. Seattle based Nordstrom, edged out Kohl’s (no stores are located in New York City, while a few stores are located in the suburbs), which had ranked first in the three previous studies. This year, Kohl’s moved to the number 2 spot, followed by Macy’s, Dillard’s and JC Penney.
Nordstrom is the nation’s favorite fashion retail chain, according to an annual consumer study conducted by Market Force Information. The upscale department store edged out Kohl’s, which had ranked first in the three previous studies. This year, Kohl’s moved to the No. 2 spot overall, followed by Macy’s, Dillard’s and JC Penney.
The survey also ranked the top retailers in five different fashion sub-categories, where Nordstrom emerged as the favorite for business wear and evening wear, Kohl’s for casual wear and children’s clothes, and Dick’s Sporting Goods for sports apparel.
Private equity firm Blackstone Group LP and shopping center owner DDR Corp. are in talks to team up again in order to purchase seven shopping centers from Regency Centers Corp. for a total between $300 million and $400 million. It is currently not known which seven centers Regency plans to sell.
In late 2012, Lisa Palmer, Regency’s CFO, told the Business Journal that the company was preparing for growth in 2013 and would continue its development track. “We’re staffed to do about $150 million of new starts per year, and the plan is to continue to do that,” she said. “But we monitor how we’re funding that to make sure that we have capacity to meet all of our commitments.”
Jacksonville-based Regency owns or co-owns more than 345 properties, many anchored by grocery stores, totaling 46 million square feet. DDR is based out of Beachwood, Ohio, and owns stakes in 454 shopping centers. Last December, DDR bought the Carolina Pavilion shopping center in Charlotte from Blackstone for $106 million.
The Blackstone Group got its first tenant for the glass retail boxes being built at 120 West 42nd Street overlooking Bryant Park. Equinox, the high-end gym, is going to be leasing 30,000 square feet, with annual rent of about $2 million. For this retail development project, Equinox is the first to sign a deal.
Other prospective tenants are Sushi Samba and Whole Foods. Whole Foods has been in long talks about creating a new concept at this location; it would hold prepared food and cater to the demographic of all of the office workers in the area. The full project has a total of 75,000 square feet.
The glass cubes include two boxes that sandwich the plaza and run through the entire block to West 41st street. This particular space is considered a crucial link for the new retail corridor being developed, between two of the city’s highest-priced retail locations, Times Square and Fifth Avenue.
The upcoming marathon in Boston has inspired retailers to open up pop-up shops that will benefit from the increased foot traffic during marathon weekend. Two startups, both related to exercise and fitness, plan to occupy space in front of Johnson Paint Co. on Sunday and Monday for the marathon. One is Janji, a running apparel company based in Brookline, and the other is Perfect Fuel Chocolate, a company that produces raw chocolate energy snacks based in the Seaport District.
Launched in May 2012, Janji sells athletic clothing inspired by troubled countries like Haiti, Rwanda, and Bangladesh in about 120 specialty stores around the nation, with a portion of the sales benefitting those nations. Additionally, Peru will be added into the mix in the fall. Perfect Fuel Chocolate was launched in January of last year.
“Boston is not the biggest marathon in the world, but it’s the most historic and competitive. People who come in identify themselves as runners. If we can talk to a lot of these people and bring them to our team, then I think the impact can be pretty substantial,” said Janji co-founder Mike Burnstein. Burnstein will be running in the marathon this year to raise money for KickStart, an organization that allows Kenyans to have better access to water.
Private equity firm KKR & Co said its affiliates and clients, including KKR Financial Holdings, purchased Colonie Center, a mall in Albany New York. KKR partnered with Pacific Retail Capital Partners, Collarmele Partners, and Peter Fair for the deal. The financial terms of the deal have not been released.
The 1.3 million square foot mall sits on 91 acres in Albany, and it generates an estimated $245 million in annual retail sales from its 113 stores. Anchored by specialty retail stores, the mall generates an estimated $400 per square foot.
Colonie Center went through a significant renovation in 2007 that incorporated a “lifestyle” retail component and an improved streetscape in order to attract retail tenants such as L.L. Bean, P.F. Chang’s, and Cheesecake Factory. KKR and Colonie Pacific say they plan to focus on attracting new tenants and will make additional capital investments.
During the first quarter, U.S. shopping center occupancies rose to a three year high, allowing landlords to raise rents as little space was added to the market, said Reis Inc.
Neighborhood and community shopping center vacancies fell from 10.9 percent to 10.6 percent, and effective rents rose to $16.63 per square foot from last year’s $16.51. Rents and occupancies were last higher in 2009.
“It’s a slow but consistent recovery,” Ryan Severino, a Reis senior economist, said. “There’s nothing being built, so as long as there’s any semblance of demand, it’s pushing vacancies down slightly and rents up slightly.”
The slowly improving labor market and little competition from new shopping centers is allowing retail landlords to benefit. In February, the jobless rate dropped 7.7 percent, the lowest since December 2008, from 7.9 percent the previous month, according to the Labor Department. During the first quarter, 873,000 square feet of new shopping centers became available, which is 57 percent lower than the previous year.
Occupied shopping center space rose by a net 2.73 million square feet in the third quarter, compared to 2.68 million square feet in the previous three months, and 3.51 million square feet a year earlier, Reis said.
Fairway Market, the popular New York metro area supermarket, currently has 12 locations, and there are plans to open a new store in Chelsea, and another in Nanuet, NY over the summer, and in the fall, respectively. Fairway announced that it is going public, which the company has been putting off since September when it was delayed because of Hurricane Sandy. Fairway stock is expected to range in price between $10 and $12 per share, and is predicted to rise as much as $164 million.
The company plans on using the proceeds from the IPO to open new stores and for other business purposes.
The retailer, with the slogan “like no other market,” opened in the 1930s as a small market. In 2007, Sterling Investment Partners bought 80% of the company, and they will continue to control the company after the IPO.
Fairway offers a wide variety of groceries, mixing natural, organic, and gourmet items, with typical grocery items like laundry detergent and toilet paper. Because of the breadth of products offered, the company has the ability to reach a very wide audience.
New York City is the home of hundreds of Duane Reade, CVS, Walgreen and Rite Aid health and beauty aid and pharmacies. A number of these locations are the homes of Walk in Medical Care facilities, requiring no appointment and a number of insurance companies accepted for payment.
During the past year a new entrant to the retail health scene is the opening of Vein Centers and Clinics. While many of the city’s leading hospitals and medical centers are the home of top vein treatment centers, local physicians as well a national organizations are search for retail locations. In the fall, USA Vein Clinics NYC opened its first location in Manhattan at 1153 First Avenue, at the corner of East 63rd Street. The company currently has a location on Ocean Avenue, near Avenue U in Brooklyn as well as on Queens Boulevard in the Forest Hills, section of Queens.
The business of treatment for varicose veins, spider veins and related venous disorders seems to be a big business on the Upper East Side of Manhattan. Just two blocks from the USA Vein Clinics is The Vein Treatment Center, which according to the its website was established in 1982, while at 400 East 56th Street is the New York Vein Treatment Center at 400 East 56th Street.
Despite economic uncertainty, consumers are still spending on small luxuries, according to a research report featured in the National Retail Federation, “Stores Magazine”
The recently issued survey conducted by BIGinsight.com, examines products and services that consumers feel are “untouchable” and “expendable” and tracks the past five years of this sentiment surrounding their purchase behavior.
The survey found that items and services such as on-demand video streaming and upgraded mobile devices have in recent years maintained staying power. On the other hand, as consumers increasingly look for ways to cut back, they are more inclined to give up high-end jewelry, maid services and magazine subscriptions.
New Jersey-based Hampshire Companies have bought the retail condominiums at Garden City Square. Metropolitan Realty Associates (MRA) and its joint-venture partner Angelo, Gordon & Co. LP sold the property at 711 Steward Ave. in Garden City for approximately $66.25 million.
The property’s retail component totals 176,000 square feet of space that is 100% leased to two long-term, prime tenants. BJ’s Wholesale Club opened in November 2012, taking 121,000 square feet for 20 years, and LA Fitness will occupy 55,000 square feet for 15 years once its two-story building opens in June 2013.
“Garden City Square’s retail portion is a smart, long-term investment with predictable returns from major retailers like LA Fitness and BJ’s in place,” said Joseph A. Farkas, president of MRA. “Furthermore, its proximity to the Roosevelt Field mall provides a steady flow of retail traffic that is irreplaceable in Nassau County.”