NEW YORK – Brookfield Place doesn’t have to be so fancy.
Sant Ambroeus, one of the city’s pricier restaurants, moves in next year, though that doesn’t reflect what’s really happening at this mixed-use upscale complex abutting the Hudson River in Manhattan’s financial district.
In 2014, Brookfield Place completed a $250 million renovation that brought in Bottega Veneta, Tory Burch, Gucci, Louis Vuitton, Ermenegildo Zegna and Hermès, among several other tony brands. Now, it is recasting itself yet again from a luxury center to what it calls “a cultural center, a hub for the community.”
With Madewell, b8TA, and a string of health and wellness brands moving in soon, Brookfield Place, with its 300,000 square feet of retail space, is likely to accelerate the changes as leases expire or kick-out clauses are triggered.
Brookfield recently set a new marketing campaign in motion to recast the image, and has been actively programming events catering to families and the community to broaden its reach, and take a step away from being narrowly regarded as a bastion of luxury. Upcoming programming includes a Halloween bash on Oct. 27; a November “canstruction” design competition building sculptures out of unopened cans of food that will be donated to City Harvest; a light installation by the Rockwell Group; Santa will be on the premises for a month up to Christmas Eve day, and Keith Michael’s interpretation of “The Nutcracker” will be performed by New York Theatre Ballet on Nov. 30, Dec. 1 and 2. This Thursday, a Candy Crush Friends Saga video game brings its “candy wonderland” downtown.
Originally called the World Financial Center, the site was partially damaged during the 9/11 attacks, which led to rethinking the property and rebuilding areas on the lower levels of the office towers to make room for additional retail. The center reopened in 2014 as Brookfield Place, named after the parent Brookfield Properties, beating out Westfield World Trade Center, just east on the other side of West Street, in luring luxury tenants.
“As the project has evolved and we’ve seen what’s happening around the world and understood the customer more, we’ve been getting our heads around the whole story,” Michael Goldban, senior vice president of retail leasing at Brookfield Place, told WWD in an exclusive interview on how the center is changing.
“Brookfield Place is so much more than a luxury shopping enter,” Goldban said. “There’s a huge office component. It’s a community and cultural hub for the neighborhood and New York City. That’s something we really want to celebrate. The branding campaign is about Brookfield Place as a very inviting, bright cultural center at the waterfront, for arts and events. We really want to emphasize that component. Food is a big part of it.”
The center has a new logo, and the campaign has been evident in subway ads and on taxis. The campaign is geared to evoke “this cultural melting pot, outdoors, great food. And shopping is still here. It’s a huge part but it’s not everything.”
And maybe not enough.
Sources tell WWD that business for retailers has been disappointing at Brookfield Place, though the food establishments, notably the Le District food hall, have done well. Some stores have closed including Diane von Furstenberg and Scoop, though Scoop closed all of its stores and went out of business.
More stores could close if retailers exercise kick-out rights, which one retail source close to Brookfield Place said could be activated after five years from lease signings, which would mean the end of 2019. “Retailers signed 10-year leases and generally have a five-year, kick-out clause,” said the source. “I believe the experience of Brookfield could be scaring people who may want to open a store at Hudson Yards.”
The Hudson Yards mixed-use complex, in Midtown on the west side of Manhattan, is scheduled to open its mall in March.
“My sense is that food has been very successful, retail is just OK,” said a former retail chief executive officer familiar with Brookfield Place. “The Saks location is a difficult spot,” at the south end of the property. “But the new programming is a smart idea. There’s a lot of young people living downtown that this kind of program could attract.”
“We have this great lineup of luxury — the focus going forward is on health, wellness, beauty and technology,” said Goldban. “We just signed a deal with b8ta coming to Brookfield with a beautifully designed kiosk,” which will be in place for at least a year, starting this month. Madewell is opening in November. Other retail tenants are being signed now, to open next year, Goldban said.
Asked about speculation that retailers aren’t performing as well as hoped, Goldban replied: “We have this collection of great brands, 95 percent are performing or outperforming. What you are going to see are the types of tenants that are a little bit different from before, but fashion is always something we care about.”
“Like any shopping center, some brands succeed, some fail,” Goldban added. “We have this pent-up demand for a lot of health and wellness in the beauty category. We are about to lease our last space. By the end of this year, we will be 100 percent leased.”
Madewell will open on the first floor, replacing Diane von Furstenberg. A more affordable alternative to Sant Ambroeus is the Seamore’s seafood restaurant which opened last July, replacing Amada.
He said Brookfield Place, “even in the supposed depths of the retail apocalypse, the strategy we employed here about place-making has really worked.”
“We are patient, if and when tenants are not performing, we will have more culturally relevant brands. Madewell, from a fashion standpoint, is really connecting with customers,” Goldban said.
Madewell will be situated near Lululemon, Vince and Club Monaco. “It’s a more the aspirational section.”
He disputed notions that luxury tenants, which are situated around the Winter Garden, are not happy. “They have performed very well,” and some have expanded their stores, he added.
Brookfield Place, which is located across West Street from the World Trade Center site in the Battery Park City neighborhood and includes five office buildings, the shopping center, the Winter Garden Atrium and a food court, declined to provide sales productivity statistics. But it did provide traffic statistics, indicating that total foot traffic across the center in 2017 was up 14 percent over 2016. Brookfield also said it gets 21 million visitors annually, or 1.7 million on average each month. Each day, an average of 83,000 people visit.
“We opened up in a difficult market,” Goldban noted. “With everything happening in the retail world, we weathered the storm. The economy seems stronger. We feel like we are super well-positioned going into the holiday season and beyond.
“Any shopping center anywhere in the country will have certain brands going through transitions. Internally, they may have some issues. Sometimes a brand is just a miss for that particular market. If somebody is not performing, we see that as an opportunity for us to make a merchandise change. The ones that aren’t performing we will get them substituted with brands more relevant to the world today. That’s the healthy thing about a project.”
He said the vast majority of the retail tenants have 10-year leases.
“The restaurants have outperformed restaurants anywhere else in the city. We are very, very pleased with the performance of the restaurant. Our retail performance is in the upper echelons of shopping centers,” Goldban stated.