By  on October 16, 2006

Unlimited Space

The Limited may not be opening the biggest stores in the New York metropolitan area, but its new corporate office was the fourth-largest real estate deal in Manhattan so far this year, as noted at Cushman & Wakefield's third-quarter market outlook presentation in New York in October.

Limited's deal, which closed this summer, consolidated the company's five Manhattan offices. The company will move into 320,000 square feet at Vornado Realty Trust's building at 1740 Broadway. Limited expects to move into the new space late next year, and was represented in the deal by CB Richard Ellis. Vornado represented itself.

The Limited deal wasn't the only retail news at Cushman & Wakefield's quarterly update. According to the brokerage firm, rents for retail space have continued to rise throughout the city; rents on Madison Avenue had jumped 5.9 percent, or more than $50, to $913 a square foot at by end of the third quarter, from $862 last year. Retail is increasingly alluring for investors, accounting for nearly 5 percent of all investment sales year to date, compared with 1.4 percent the year prior.

Cushman & Wakefield senior director Joanne Podell confirmed that both Nordstrom and the Home Depot are looking for space in New York, Nordstrom for its first city store and the Home Depot for its third.

Big Boxes Move South

Bed Bath & Beyond will join Whole Foods Market and Barnes & Noble at 101 Warren Street in the TriBeCa neighborhood of Manhattan. It will open a 33,500-square-foot store in a 1 million-square-foot mixed residential and retail property being developed by Edward J. Minskoff Equities Inc. and designed by Skidmore, Owings & Merrill. The remaining 5,000 square feet of retail space available in the building is being marketed by Robert K. Futterman & Associates to upscale fashion retailers and luxury home furnishings stores.

Masstige Marches On

The trend in masstige continues to drive real estate leasing and development, according to Colliers International's most recent North America Retail Real Estate Highlights report. Discount retailers were the most active retailers when it came to real estate expansion, followed by restaurants, drugstores, banks and supermarkets.The trend to value retailing is driving the development of more power centers and neighborhood sites, which feature big-box stores and grocers, while lifestyle centers remain popular, fueled by strength in the other end of the retailing spectrum, luxury goods.

Retailers are more and more attracted to urban shopping districts and downtown areas, which are drawing both Baby Boomers and Echo Boomers for their convenience and variety of services. According to Colliers, 75 percent of metropolitan areas reported growth in urban retail, including unexpected cities such as Atlanta, Dallas, Denver, Los Angeles, Minneapolis, Phoenix and Sacramento, Calif.

Newest Giant on the Block

Heritage Property Investment Trust, a Boston real estate investment trust that focuses on grocery-anchored shopping centers, has completed its multibillion-dollar merger with Australia's massive Centro Properties Group, creating one of the largest community shopping center portfolios in the U.S. Heritage owns and manages more than 170 centers across the country. Under the terms of the merger agreement, common stockholders will receive $36.68 in cash per share. Centro owns properties in Australia, New Zealand and the U.S.

Adding Sparkle to Omiya and Austin

Tiffany & Co. opened its newest store, in Omiya, Japan, last week. The 1,600-square-foot boutique will be in the Sogo department store and gives the luxury jeweler 53 locations in Japan. The boutique, though small, will emulate the architectural details of the Tiffany flagship in Manhattan.

On the other side of the world, the retailer expects to open its first store in central Texas, a 5,000-square-foot shop at the Domain, Simon Property Group's new mixed-use project in Austin, next March. The "urban village" is the perfect location for Tiffany, said a spokesperson for the retailer, who noted that Austin is a "dynamic and growing city with many cultural and educational institutions."

Gas Prices Take a Holiday

Gas prices have dropped in the past several months, much to the joy of drivers and consumers alike. According to analysts with Wachovia Corp.'s Economics Group, the drop in gas prices translates into roughly $12 billion more in the pockets of shoppers in the fourth quarter of this year compared with 2005.Though it sounds like a lot of cash, $12 billion is a drop in the bucket, given that consumers spent $8.9 trillion in the fourth quarter last year, according to Wachovia. Still, the lower cost of gas should increase discretionary spending somewhat — good news for retailers and mall owners gearing up for the crucial holiday season. Analysts expecting solid gains in sales during November and December.

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