retail hudson yards capital expenditures

One of the developers of Hudson Yards, the city within a city rising on the far west side of Manhattan, sounded an optimistic note about the progress of the retail leasing at the Shops and Restaurants at Hudson Yards during a panel discussion about the district presented during the 2016 CREW Network Convention and Marketplace.

“By the end of the year, we’ll be 65 percent to 70 percent leased,” said Kenneth Himmel, president and chief executive officer of Related Urban, a division of the Related Cos., which is building Hudson Yards with Oxford Properties Group. By [mid-year 2017], we’ll be 80 percent to 85 percent leased. We’re going to open [in fall of 2018] with 90 percent of the retail leased.”

The Shops and Restaurants at Hudson Yards will have 750,000 square feet of leasable space. About 218,000 square feet is spoken for: It will be occupied by the first Neiman Marcus unit in Manhattan, spread over three levels.

Himmel noted that there will be 100 stores at Hudson Yards. So far, about 30 leases have been executed, Himmel said, adding that Related plans to release the names of the retailers during December’s International Council of Shopping Centers convention in Manhattan.

As previously reported, Tory Burch, Coach and Stuart Weitzman have signed leases on the ground floor of the Shops. In addition, H&M has leased nearly 29,000 square feet on floors three and four, and Zara, 24,000 square feet on the third and fourth levels. Also committed to the third floor are Banana Republic, which is leasing 7,500 square feet; Aritzia, 6,120 square feet, and significantly smaller stores include MAC Cosmetics, Athleta and Origins.

Cartier, Victoria’s Secret, Sephora, Eileen Fisher, Uno de 50, Kiehl’s, Urban Decay and Kendra Scott are reportedly close to signing leases. Himmel said Related is negotiating with “everybody on the prospect list,” referring to the company’s leasing plan.

“I don’t know how much traction they’re getting from luxury tenants,” said one retail broker who has worked with Related. “Mass luxury tenants like Cartier will probably open there.”

Some on Related’s leasing plan seem like a stretch, including Van Cleef & Arpels, Christian Louboutin, Dior and CH Carolina Herrera. Others, such as Hugo Boss and Williams-Sonoma are longtime tenants at The Shops at Columbus Circle, an earlier vertical retail project spearheaded by Related, and could be seen opening units at Hudson Yards.

“We feel this is an incredibly iconic project and in a great area in the city,” said Jeffrey C. Paisner, partner at Ripco. “What’s happening on the west side of the city is miraculous. Hudson Yards will do well with the population they’ll have there and it will attract tourists with the park,” a reference to the project’s 14 acres of open public space.

Discussing the transportation infrastructure the Metropolitan Transit Authority is building to serve the district, Shawn Kildare, senior vice president and program executive, 7 Line Extension Program, MTA Capital Construction, said the new subway station scheduled to open in early 2018, will carry 35,000 passengers a day. “It will be the single most-used station in Manhattan,” he said. “In the near future, a new signaling system will allow more trans to run — quicker-running trains and more per hour.”

The west side is expected to get increasingly crowded in the next few years. In addition to Hudson Yards’ 20 million square feet of ground-up construction — 10 million square feet of which is completed or under way, according to Himmel — there’s Manhattan West, a seven million-square-foot neighborhood being developed by Brookfield with office, retail, residences and a boutique hotel.

Joseph Moinian, founder of ceo of the Moinian Group, is developing a tower at 3 Hudson Boulevard, which will have retail at the base. There’s also Moynihan Hall, the former Farley Post Office building on Eighth Avenue. The project, which is said to be a priority for Gov. Andrew Cuomo, calls for 700,000 square feet of retail space and a 250,000-square-foot train station. Vornado and Related will be developing Moynihan Hall, which is seen as a huge shopping mall and link to Hudson Yards and points south.

Retail has grown in the city within the last few years with Brookfield Place and Westfield World Trade Center opening downtown, and the Seaport District being redeveloped by Howard Hughes. Projects such as Hudson Yards are “making Manhattan bigger” with six million more people expected by 2030.

Manhattan is the most underserved market in the U.S., Himmel said, adding that there aren’t so many places “in terms of critical mass and areas of concentration where retailers feel comfortable doing business.”  Added Moinian, “Yes, a lot is being built, but it’s not being done in one day.”

The proximity of the High Line, which will reach Hudson Yards’ retail plaza, as well as a restaurant collection headlined by Thomas Keller’s retro-Hollywood steak house, will be strong incentives for shoppers to visit. “The entire complex is built around Neiman Marcus,” Himmel said. “The retail stands out and makes a statement.”

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