Despite continuing economic and consumer worries, there’s still plenty of demand for top-notch retail real estate in New York.
“Retail rents are now well above their all-time highs, approaching $3,000 per square foot on [upper] Fifth Avenue and $2,000 per square foot in Times Square,” said David Greenbaum, president of Vornado Realty Trust’s New York division, on a conference call detailing the company’s third-quarter results. “The [New York] retail market is very strong, driven by the continued growth in tourism, which is expected to reach 52 million visitors this year.”
Rents on Fifth Avenue from 42nd Street to 51st Street have almost doubled over the last year, said Greenbaum. Vornado has also seen retail strength on Madison Avenue and in Times Square.
And the high-cost stores that pack into these prime spots are not just show pieces, he said.
“Some of our retailers…approached sales per square foot of $6,000, $7,000 and $8,000 a foot on some small stores,” Greenbaum said. “I don’t think these things are just ‘advertisements and branding.’ I think companies today, and especially a number of the fast retailers that do their own production, these stores really are making money for them.”
Although Vornado has been trimming its portfolio as of late, it’s holding onto its investment in J.C. Penney Co. Inc. The company teamed up with activist investor William Ackman and amassed a combined 26 percent stake in the retailer in October 2010. The chain is now being reinvented as a specialty department store under the guidance of chief executive officer Ron Johnson.
Vornado’s adjusted funds from operations were basically flat at $744.4 million for the nine months ended Sept. 30, but the company has taken a hit on its Penney’s position. The real estate firm logged a mark-to-market loss of $53.3 million on its Penney’s holdings for the nine months.
Steven Roth, chairman of Vornado and a Penney’s board member, said, “This year, which is the transition year, is a difficult year [for the retailer]. It’s actually no secret that it’s proving out to be more difficult than the management team thought….We remain committed to the investment.”
Vornado beneficially controls 23.4 million shares of Penney’s, or 10.7 percent of the company’s stock. Shares of Penney’s slipped 2.3 percent to $23.70 Friday — down from the roughly $28 the stock was trading at before Vornado and Ackman’s initial investment was made public.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia