NEW YORK — Last week’s International Council of ShoppingCenters Conference and Deal Making at the Sheraton New York Hotel &Towers and the New York Hilton & Towers was a hive of activity.Attendance at the conference was the highest it’s been in five years,6,937. The low, in 2009, was 5,746. “It’s very, very busy,” said WilliamTaubman, chief operating officer of Taubman Centers Inc., which hasthree centers in the works, International Market Place in Honolulu, TheMall of San Juan in Puerto Rico and University Town Center in Sarasota,Fla. “There’s a lot of action. You can tell by the mood around thisroom. A lot more deals are happening, absolutely.”
Peter Leslie,senior executive vice president of leasing at Westfield Group, soundedpositively starry-eyed when he spoke at the Australian company’s party.“We believe we’re out of the recession and into the blue sky,” he said.“We’re making a massive reinvestment in the U.S. We’re spending $4billion in the next five years.”
That includes adding 500,000square feet to Garden State Plaza in Paramus, N.J., increasing the sizeof Valley Fair in Santa Clara, Calif., and developing and leasing theWorld Trade Center’s 365,000-square-foot retail component.
“There’sincredible progress being made downtown, most significantly atBrookfield Place, the new name for the World Financial Center,” saidStephen Stephanou, a broker at Crown Retail Services. “The push thereseems to be for well known luxury brands and young fashion brands.”
Accordingto retail sources, Brookfield has “convinced Louis Vuitton to take abig piece of space and J. Crew, two spaces. They’re talking to Hermès,Michael Kors, Ferragamo, Prada and Steven Allen.”
“Real estate inNew York City seems to be booming,” said Robert Siegel, chief executiveofficer of Metropole Realty Advisors. “Madison Avenue is back to whereit was before the crash — $1,000 per square foot.”
CrownAcquisitions has a stake in Olympic Tower on Fifth Avenue between 52ndand 53rd streets, where it plans to reposition the property and convertthird-floor office space into retail. “Fifth Avenue is a$3,000-a-square-foot market,” said Brittany Bragg, a principal at CrownAcquisitions. “Tenants keep paying because they’re successful at thoserents, with $50 million to $100 million in annual sales. Retailers tellus they used to open 100 stores a year. Now they open 25 stores” withhigher volumes.
“Now that rents have risen to a certain level,it’s making economic sense for [retail] tenants to purchase and ownspaces that are vital to their brand identity,” said Jeffrey C. Paisner,a broker at Ripco Real Estate, citing Inditex’s $324 million purchasefor Zara’s flagship at 666 Fifth Avenue. “It used to be better to paythe rent and use your capex to build other stores, but now thecomputations changed.”
Thor Equities on Wednesday said it formed ajoint venture, Thor Urbana Capital, with a Mexican developer, to invest$500 million in Mexico. Thor is focusing on Mexico, Peru, Brazil andColombia “because China is slowing down, so retailers are looking foralternative growth,” said Joseph Sitt, founder and ceo. Thor’s holdingsin Manhattan are growing. “We’re in contract to buy the entire block ofWashington Street between 13th Street and 14th Street, where Scoop has astore,” Sitt said. “Tiffany, Louis Vuitton and Giorgio Armani arelooking to build flagships in the Meatpacking District.”
“Thediverse projects in our region and other parts of the country indicatevery clearly that, ultimately, the American shopper is out buying at allprice levels,” said Lisa Rosenthal, a broker at Lansco.
On thealternative front, Pier 57, a floating mall near 15th Street, isexpected to open in April 2015. Its first tenant will be the TribecaFilm Festival. Norm Roumanous, development director, said half of the300,000 square feet of space will be used for food and the other halffor fashion, culture and entertainment. “We’re targeting $1,000 persquare foot in sales,” he said. Retail spaces range in size from 160square feet to 20,000 square feet. Pier 57 is reportedly talking to Nikeand J. Crew.
For Michael Glimcher, chairman and ceo of GlimcherRealty Trust, the experience is everything. Glimcher is raising food to20 percent of the total mix at centers, from 10 percent, adding yogastudios and bike shops, along with outdoor space. There will be morepersonal care options such as salons. “It’s not that we don’t want tosell shoes, handbags and dresses,” he said. “If all we are is adistribution channel,” consumers will lose interest. At ScottsdaleQuarter in Arizona, there’s an outdoor splash pad for kids as well asfarmers markets. Town Center Plaza in Kansas City will build a bandshell for outdoor concerts, along with a coffee bar and eatery.
“Wetry to storyboard the experience,” Glimcher said. “We have an activepipeline. We will expand Polaris Fashion Place in Columbus, Ohio, withmore retail in 2014. We have a lot going on making what we have better.”
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