COVER STORY, DECEMBER 2007

SURPASSING EXPECTATIONS
New York City continues to be a hot retail destination.
Moderated by Jerrold France, Randy Shearin and Stephanie Mayhew

The new towers at the World Trade Center site are set to change the dynamics of the retail market in Downtown Manhattan, New York City.

Recently Northeast Real Estate Business and Shopping Center Business held their annual New York City Retail Roundtable at the office of Meister, Selig and Fein LLP in Manhattan. Many thanks to Meister, Selig and Fein for hosting us once again. A unique mix of brokers, developers, and lenders came together to discuss the current state of retail activity in this most sought after market.

Participants included Damon Hemmerdinger of A&Co., Joel Braun of Acadia Realty, Andrew Pittel of Andrew Pittel & Company, David Cohen of GE North America Lending, Matt Harding of Levin Management, Ariel Schuster of Robert K. Futterman, Danielle Brunelli of R.J. Brunelli & Company, Franklin Zuckerbrot of Sholom Zuckerbrot Realty, Deborah Jackson of Weiser LLP, Simon Ziff of Ackman-Ziff Real Estate Group, David Silver of Levin Management, Ed Hogan of Brookfield Properties, Ken Benjamin of Benjamin & Associates, Andrew Fawer of CIBC World Markets, Gary Schwartzman of Grubb & Ellis Retail Group, Ben Fox of Winick Realty, Lynn DeMarco of Staubach Capital Markets, Michael Stone of Cushman & Wakefield, Cory Zelnik of Zelnik & Co., Charles Cristella of Stanberry Development and Matt Kasindorf, of Meister, Selig & Fein.

NREB: How is the current credit crunch affecting commercial real estate? Deborah [Jackson], as someone who watches the industry from the outside in, what is your opinion?

Jackson, Harding, Demarco and Silver

Jackson: The impact on the retail side is not what people would expect from what is being said in the press. Our business is impacted by two things. One is tenants wanting space, and, two the demand for space. First of all, it is not impacting the luxury market because there is so much money chasing so little product. What happens too in this market is when the credit gets a little bit crunchier, people use cash, so we are really not seeing the type of impact that you would think. Some retailers might be feeling it in their sales, but overall, sales are good, investor interest is strong, and in this city, in particular, all sorts of tenants are coming in, both foreign and domestic, and many of these new tenants want to have flagship stores here. Space is such a commodity in this city that the impact of the credit market is not as much of a factor. 

NREB: David [Cohen], do you want to comment on the market for lenders?

Cohen: There is a lot of volatility in the markets, both on the swap side and on the credit side, which is also having a major impact on the CMBS market today. There is obviously a slow down in the amount of acquisitions and new financings right now. The types of product are getting creative in order to create more value. You look to the sponsors to increase their net cash flow over a short period of time by taking below market leases and bringing them to market, backfilling vacancies and obviously going towards the rent growth. That is where you are going to see most of the financing today. There is an unlimited financing in the markets that is mixed financing. I don’t think the CMBS market is back to where it was before the summer.

NREB: Simon [Ziff], do you want to touch on the current lending climate?

Ziff and Pittel

Ziff: The last 2 weeks have been significantly better than the last 2 months. We have been working on some retail transactions with spreads that are 30 to 40 basis points not from the low point, but from the high point. We do a lot of large construction loans and the foreign banks have kind of paused, which has probably had the biggest impact on our largest deals. As far as floating rate financing, there is definitely a shortage of transitional financing right now and I am hoping that it will come back in first quarter 2008.

NREB: Lynn [DeMarco], you deal primarily with the investment community and institutional investors. How are they seeing demand for properties? What are they looking for and how are they buying them.

DeMarco: Institutional investors have been aggressively seeking core properties, which have not undergone too much change in cap rates. In the secondary and tertiary markets there is more of a widening of cap rates.

NREB: On the sales side, are sellers holding properties, or are they possibly waiting for the end of the year?

DeMarco: There has been a big push for the end of the year. We have been very active in pitching new business and bringing new products onto the market. There are a couple different kinds of deals that are most attractive right now. Deals that have financing in place that people can assume, which will be attractive because somebody can actually measure the returns that they are going to get as opposed to having uncertainty as to where they could be. As far as the core properties, we have brought several core and closed several core properties on the East Coast that have been very well received.

NREB: Switching the focus to the New York area. Michael [Stone], do you want to talk about the investment community and how properties are being looked at and acquired in New York City?

Stone: Activity is still strong, but there is a lack of product, which is not expected to change anytime soon. I have not seen any rent compression, and a lot of players are sniffing around for product, but there is not enough coming on the market.

NREB: Are owners holding out or waiting for better pricing? Or, is it simply just a lack of product to sell?

Stone: It is lack of product to sell. On rare occasions, owners are holding out. In secondary markets, for instance, in the Gold Coast of New Jersey, owners are trying to ride the wave of rent depreciation in the primary markets, but they can only hold out for so long because there is just not as much product and there is strong demand.

NREB: Matt [Kasindorf], what are you seeing in terms of the market activity here?

Kasindorf: On the investor side, the major move across the board is owners and developers trying to back-fill their equity. So, everybody is quick to align themselves with institutional equity players and preferred equity players to combine forces. Everybody is now quoting 65 percent to 75 percent and zero appetite for mezzanine, which is forcing all of the developer’s investors to rush to restructure those deals with equity instead of debt.

NREB: Andrew [Fawer], do you have thoughts on this?

Fawer: Generally speaking, there is some liquidity in the marketplace to finance, and the level of fixed-rate financing and the cost of funds for fixed-rate financing isn’t unusually higher than historical levels. We have just gotten so used to having extremely cheap financing over the last couple of years that it becomes sticker shock to borrowers. A lot of deals are not making sense for a lot of borrowers. The fundamentals in the New York area are still good, but we are underwriting at normal levels. That said, obviously activity is down, but if you have a good project it will get financed; albeit, at a higher cost and more equity involved, but it will get financed. It certainly has put the brakes a little bit on the amount of building and buying that will be done.

NREB: Who are some of the retailers that are coming to the market in New York City proper? Who is active?

Schuster: In terms of active retailers, I think the luxury tenants are expanding. For example, Tiffany and Hermes on Wall Street and now Tumi. The rents there have quadrupled in the last 2 to 3 years. Rents on Madison Avenue, which has become a jewelry strip, are now north of a $1,000 per square foot, and the jewelers are making money there. The meatpacking district is also attracting luxury tenants. That is one sector of the market that is very strong. On the other hand, there are several new, interesting projects that have come on the market in the last few years because developers are getting creative in creating space for big-box tenants. Bed, Bath & Beyond was the leader in terms of suburban boxes coming to New York City. Oftentimes, with multi-level buildings, the loading docks aren’t there, but the sales volume is still great, so there is a huge demand to enter the city. We did a project at 270 Greenwich, which was a power center with a Whole Foods and a 70,000-square-foot Bed, Bath & Beyond. There is a similar project at 808 Columbus with a Whole Foods and some other boxes, and it might possibly include some department stores. We are also working on another project on 57th and Second Avenue, which will include 180,000 square feet, the bulk of which will be below grade. Developers are getting more creative architecturally and being smarter. That kind of high-density space may cost a little more to operate the store, but because of the amount of returns it makes sense.

Jackson: A project like 808 Columbus is intriguing because there is a movement up in the Upper West Side, and having a Whole Foods right there is going to encourage people even more. It is an area that is transitioning. For example, you have the local tenants on the Upper West side that are being displaced by the national tenants, and foreign tenants are looking at the area as well. Mango is opening and Japanese companies are coming in, and Hollister is going to open a flagship store here. Foreign tenants or tenants looking to open up a flagship store want it to be here. Tenants are being creative and going to areas that they might not have considered before or are downsizing their space needs to fit into the city. Whole Foods is a great example of that. They are creative because they want to be here.

NREB: Andrew [Pittel], do you want to speak about some of the retailers you are working with and where they want to go?

Pittel: We are handling a large space up on Columbus Avenue, not far from 808 Columbus, and because of Whole Foods, the landlord is holding off to try and get better rents. The asking rate was $60 per square foot last year and now the rate is $85 to $100 per square foot. I think it is giving luxury retailers the opportunity to look at other areas. Also, in the Bowery, the landlord we are working with there is holding off on renting the space. Brokers are asking each other what they are asking for in rent and it just keeps going higher and higher. It is a wait and see.

NREB: Ben [Fox], you are representing that new project [808 Columbus], do you want to talk a little bit about it.

Fox

Fox: In addition to Whole Foods, we have a lease out with another supermarket, fashion stores, and other big-box retailers. In some cases, I think size does matter. You can take a retailer that is in the 25,000- to 60,000-square-foot range, and that retailer does not necessarily have to compromise on location. Retailers are staking out unchartered territory, but because of who they are, their name, their brand, what they sell and the uniqueness of their product, New Yorkers will beat a path to their door. The key is really the brand and who the retailer is. As far as rents go, Starbucks is a good barometer. They know the value of a dollar, and I think you will start to see resistance from some of the bigger tenants, which I think is healthy.

NREB: What are some of the new areas in New York City that retailers want to see and be in?

Zuckerbrot: Outside Manhattan.

Fox: There is not such a thing as an emerging neighborhood in Manhattan anymore. There will probably be more action on Delancey Street because the city has issued some RFPs for the Essex Street market and a few other sights in that area to the Bowery going east.

NREB: Is Harlem still a hot area?

Fox: It is still a hot area, but the problem is 125th Street is maxed out. There is no space and it is getting a little too expensive. There is no other street in Harlem that matches 125th Street for action, so that is the problem. You could find a terrific site on 116th Street, but retailers are hesitant because the foot traffic is not there. It will take a powerful retailer to go off 125th Street in order to create synergy that will attract other retailers.

Hogan: There is a lot of merging taking place in Manhattan. Bank of America tower is going in at the corner of 42nd and the Americas, Blackstone reskinning the Verizon Building, Brookfield is making upgrades to the Grace Building. The density in that corner will be amazing; however, the retail at that corner and the office population don’t match, so there will be a retail change as that office population fills up. There will also be tremendous growth in the Hudson Yards area. The whole West Side of Manhattan is a huge opportunity for retailers. The density of the Hudson Yards project is 12 million square feet of new space, which be similar to a small city in 26 acres with 70-story office towers and 50-story residential towers. Retailers will do back flips to have that type of density above them, so as that gets built and matures, it will be another venue for retailers to be. Retailers love Manhattan because of the density. Downtown, the retail at the World Financial Center will be redeveloped, which will double retail offerings there, but the biggest problem for retailers downtown is where to go. There are not enough stores on Wall Street, the street is too broken up. It could become a solid shopping district, it is just a matter of someone building the right sandbox for the retailers to come Downtown.

Pittel: Construction on the Second Avenue subway should increase retail traffic on the East Side tremendously.

Schwartzman: On the other side, where Silverstein will be building, is the perfect combination for retailers. That area has a growing residential population that has doubled in the last couple of years, and it is located at a convergence of transportation. The walk to work concept is really driving the development in that area.

Harding: As was mentioned earlier, activity is moving outside of Manhattan. We are working on a 24-acre mixed-use redevelopment with about 75,000 square feet of retail and restaurants in Edgewater [New Jersey] on the Gold Coast. Many of the retailers we are talking to are from here [Manhattan], so residents are familiar with them.

NREB: What about retail activity in Brooklyn? Is it tough to find space there?

Fox: The growth in Brooklyn is unparralled. There is a growing middle class, a growing lower-middle class in addition to an upper income community as well. All of the infrastructure is there, making it a terrific place to open a store and more and more retailers are seeing that. There is probably more growth in Brooklyn now than in Manhattan in the last 5 years. We are handling more than 1 million square feet of retail space there from Myrtle Avenue in Williamsburg to Atlantic Avenue.

NREB: Franklin [Zuckerbrot], you are doing some projects out there as well?

Zuckerbrot: Yes, I concur with Ben [Fox]. In all of the boroughs, there is a continued testing of formats and growth of formats to get power center retailers into the city of New York and the boroughs. Bed, Bath & Beyond opened the door to that and Target also helped with the concept of multi-level stores. The stacking concept is occurring in all of the boroughs. In the east side of Harlem, there is a plaza being built by Forest City Ratner and Bloomingfield Development, which is allowing entry for Target, Home Depot and the like. In the southern section of the Bronx, about 1 million square feet is being developed by Related with some of those same retailers. Vornado is building Rego Park in Queens, which will also include those national retailers as well as a Century 21 department store. In downtown Brooklyn, a second Target is set open a second location just about a mile from the first. Two Targets so close to each other in downtown Brooklyn is an amazing story. Aside from the stacking trend, a large supply of national retailers with an emphasis on food are coming into the boroughs, all of which are doing well and succeeding. We just did our first Panera Bread in Queens and the numbers are off the charts.

Schwartzman: It is a matter of build it and they will come.

Zelnik: It shows the overall density of these markets in terms of population and the general economic strength of New York City as a whole. The downturns that we are reading about in other parts of the country just don’t seem to happen in New York City. It just continues this upward climb. People that find Manhattan too expensive to live in go to Brooklyn or Queens, and they need to be serviced as well. Some of the up and down development has to be done because of the cost; therefore, the prices have worked their way out from an acquisition perspective and come back into the development cost which works its way back to the retailers. I think it is a very positive sign that retailers like Target and Bed, Bath & Beyond have figured it out. All of the hesitancy is internal, and it just takes one to make it work. It takes time to get to that point, but there are very few if any retailers that have tried it and failed at that level.

NREB: Damon [Hemmerdinger], you developed The Shops at Atlas Park in Queens. How is that doing?

Hemmerdinger

Hemmerdinger: One of the things that is interesting to watch, but can be hard to get your arms around, is how quickly the demographics are shifting in some of these neighborhoods. As residential prices go up, the pace in which residents are moving into the other boroughs or New Jersey neighborhoods is astounding. Tenants are starting to understand that and are contacting us for more information about what is going on in certain areas and what customers are coming to the properties.

NREB: Who are some of the tenants you have worked with?

Hemmerdinger: We are in communication with virtually all of the better tenants. We have limited our search to certain retailers and they are all starting to take a different look at the area. Foreign tenants see Queens as an area with a large immigrant community and residents who know the international brands, which gives them a different level of comfort with the market than some of the American brands. The area is definitely building momentum.

Zuckerbrot: Are food retailers a big part of your project?

Hemmerdinger: Yes, I think that is true of most of the lifestyle oriented projects around the country because more and more people are spending money on life experiences and on social interaction. We have seven restaurants in our project and we are planning to have more in the second phase.

NREB: Joel [Braun], you are developing a couple of projects in the Bronx. Tell us about the activity in that neighborhood?

Braun

Braun: It is amazing to see the changes from month to month in the boroughs. There are so many projects coming onto the board. In downtown Brooklyn, there is so much going on, it is almost unstoppable at this point. We have a large project in the Bronx on Fordham Road, and from a retail perspective it was leased up very quickly. If we had waited to lease it up, we probably would have ended up with better rents, but we thought we needed it leased up for financing purposes. As far as retail is concerned, Fordham Road has always been very strong. Retailers have been willing to take basement, second floor and even third floor space.

NREB: What types of retailers are most interested in the boroughs right now? A couple of years ago it was all big-box, so who wants to be there now?

Zelnik: There are still places that the big-box retailers can fill. I think there will be a handful of opportunities for mid-sized big boxes and there will be back-fill spots in the different projects or in between them. In terms of emerging markets, it is the spaces between all of these new projects. Some tenants are still going to need a place to go with some level of affordability from a rent perspective. I think there will be an interesting dynamic throughout the city between this project and that project, wherever they may be in Manhattan.

Zuckerbrot: The retailers that are really focusing on the outer boroughs are those that offer basic good and services and moderately priced soft goods. By and large the higher-end retailers are not focusing on the outer boroughs. The needs for the basic goods and services are unmet, especially because of the explosive growth in population. In areas in downtown Brooklyn, the surrounding areas and in parts of Queens, the residential growth is unbelievable. The largest zoning the city has ever seen is in Jamaica in Queens. Jamaica Avenue is a very strong market in the boroughs and it will get even stronger. I think you will see more opportunity for boxes to come in and fill the need for basic goods. That is why Target is doing so well in the outer boroughs.

NREB: What is driving the development?

Pittel: It is like a mall concept. It is a common thread between all of the boroughs. An anchor tenant is brought in, traffic is generated and other tenants follow.

NREB: Andrew [Pittel], what do some your clients see in terms of the boroughs?  What types of tenants want to locate there?

Pittel: In areas such as Williamsburg, interest is still coming mostly from the smaller/local retailers and not so much the major nationals.

NREB: Changing gears a bit, Levin manages a number of properties in New Jersey. Can you give an overview on how the market is doing in terms of tenancy and occupancy rates?

Harding: We have not seen any rent compression in New Jersey. There are some bankruptcies that happened recently that have put some more space on the market, but we see that space generally being absorbed. New York City retailers have been moving out into New Jersey and vice versa. Fairway, a New York City retailer, opened in Paramus, so it will be interesting to see how they do.

NREB: Danielle [Brunelli], R.J. Brunelli does a lot of retail leasing in New Jersey. Who are some of the tenants looking in that area? And what kind of properties are they asking for?

Brunelli

Brunelli: Right now I am working with a few restaurants that are new to the market. Kona Grill, a 7,000-square-foot Asian-American restaurant similar to PF Changs, as well as Boston Pizza, which is a sports bar, and also, Kudo Bean, a new café that is trying to compete with Starbucks. Sonic is now entering New Jersey and will be opening several restaurants over the next couple years, and ULTA Cosmetics is strategically expanding. It is hard to find space, so retailers often have to make deals now and wait a couple years. In New Jersey, I estimate that there is about 4.5 million square feet under development or has been constructed in the past year, and more than a million square feet of that are lifestyle centers.

NREB:  Charles [Cristella], your company is active in developing smaller lifestyle centers, and you have had success throughout New Jersey. Can you discuss some developments that are going on now or that you have opened in the last year?

Cristella: Our first project was and 80,000-square-foot center in Denville, New Jersey, on Route 10. We look for maturity more than growth in the markets and northern New Jersey has been great for that. As markets shifts, mature customers still have some disposable income. Our most recent project, which opened in October, is the Shoppes at North Brunswick at the intersection of Route 1 and 130. It is about 175,000 square feet and fills a void for tenants in that market. Many tenants in New Jersey are concerned about cannibalization, but they are downgrading their radius restrictions. Most were looking at a 12 to 20 mile radius and are now they are looking at 5 to 7 to 10 miles.

NREB: You have several tenants that follow you around and go where you go. How do you develop that kind of cache with tenants?

Cristella and Stone

Cristella: We are actually very tenant driven. For example, Talbot’s told us 5 years ago that they wanted to be in Flemington, so we spent 5 years looking for a location and we now have the Shoppes at Flemington in Flemington Circle. Banana Republic told us that they wanted to be in North Brunswick, so we found a location there. We are very tenant driven and we listen to the tenants. Once a quarter we meet with the key retailers that we deal with and we ask them where they want to be.

NREB: Michael [Stone], where do you see the demand?

Stone: There is a lot of demand for downtown areas. There is still a fair amount of gentrification and a significant amount of residential development up and down the coast and along the Gold Coast. Retailers are taking a look down there because of the income and density.

NREB: Matt [Kasindorf], are you seeing any issues in leasing?

Zelnik, Kasindorf, Benjamin and Cohen

Kasindorf: I think the biggest problem in Manhattan is coordinating space for stores that have very definitive models into unique turn-of-the-century buildings. That has been a logistical problem in Manhattan for years, but as these retailers who have yet to experience New York City before, come here for the first time, it causes some retailers some strain.

NREB: Ariel [Schuster], is that still a concern with your clients looking for space?

Schuster: Yes, but it is just a function of trying to think outside the box. Tenants have to be creative and think away from their model and ROI because the top line and the bottom line is so substantial in New York City. Tenants have to get a little more involved because it is a higher level of understanding than your typical retail deal.

NREB: Ed [Hogan], are you getting a lot of interest from retailers outside the city for the World Financial Center?

Hogan: Yes. Just in the last 3 months, there has been a whole new level of interest from retailers asking where they can be Downtown. Sales for retailers that have opened Downtown have been very healthy, so the demand is definitely there. In Manhattan, the space is expensive, so for retailers it is a different pro forma from their other models, and whether they are based in New York, or the Midwest or California, the retailers have to come into the city and look at the property to understand it.

NREB: Are you seeing that same high level of desire for properties in the boroughs?

Zelnik: It is mixed in regards to where a retailer will look first. It is mostly demographically driven. It starts with a number on piece of paper and then the retailers spend time in the outer boroughs and work their way into Manhattan in order to understand Manhattan’s vertical concepts. There is really no specific percentage on where retailers will go. If it is a flagship store or a major retailer they will want to be in Manhattan to make a certain statement, but if it is about numbers, more retailers will go for the outer boroughs. Target is a perfect example of this. They are spending time in the outer boroughs to figure it all out and then will work their way in.

NREB: Ken [Benjamin], can you give us an overview of the theater industry?

Benjamin

Benjamin: The theater business is going through another evolution as it did in the mid-1990s when theaters were converted to stadium seating and larger theaters. After some bankruptcies in 1999 and 2000, theater owners came back with more upscale theaters in which quality was emphasized. Now, the current evolution is focused on bringing in the food concept. Food is being served in either restaurants at the theater or in the auditoriums themselves. There are very limited number of companies that would consider coming into the city because they are just afraid of it. There will be more changes in the theater industry as the distribution of film changes and theaters are digitalized.

Zuckerbrot: We are actually working with a theater chain, Village Roadshow, which is bringing a higher-end food component into the theater. It is a smaller platform with five- to six-screen theaters, low density seating of approximately 100 seats per theater. It is a much higher price point, but the concept is more of an evening out and is likened to a home theater style experience. It is an international concept that is coming stateside and it has been doing very well.

Benjamin: There are a couple other concepts like that, Muvico is putting a theater in at Xanadu. They are wonderful theaters, but are expensive to build. Another high-end company is IPic Entertainment, and their concept mixes the theater, a bar, food, bowling and other recreational concepts.

NREB: What are some of the projects that are going up in Manhattan that are really catching people’s attention? Also, what about the boroughs and New Jersey?

Schuster: A project at 250 East 57th Street on 2nd Avenue is probably one of the hottest developments going on right now. Phase I is set to come online in 2009 and phase II is slated for 2011. It is being developed by the Worldwide Group and will include condos and 180,000 square feet of retail, which was designed specifically for the national and bigger boxed tenants.

NREB: How do you think the Meadowlands Xanadu project will impact the retail market?

Pittel: I am working on a few deals there. The developers are staying away from calling it a shopping mall. It is an entertainment facility, so it should not have an impact on city retail what so ever. They are building a subway system that will make it very easy to go back and forth. It is really an entertainment place.

Braun: It is not going to effect New York City, but what is it going to do to Paramus?

Pittel: I don’t think it is going to touch it. People will go to Xanadu with their kids to go skiing or go to the movies. The retailers going into Xanadu are not your typical retailers.

Brunelli: It is going to be more of a tourist attraction. People will have to think about it in advance before they go and they will spend an entire day or even a weekend. It will be amazing how much will be there. There will be 200,000 square feet of restaurants alone. It will be families or couples going there to spend time, so I don’t think it will take away from Paramus.

Harding: Xanadu is so specialized and it is pulling from such a wide radius, so the impact is going to be spread out.

Brunelli: Developers of Xanadu expect roughly 55 million people to visit every year.

Schwartzman: I think it is notable that a few retailers, such as Cabella’s and Lucky Strike, are making their first entry into the market in the Xanadu development.

Jackson: In all of these markets — Paramus, Downtown, parts of Brooklyn and the Upper West Side — it is really about the economic and demographic profiles. There is an expanding population base with high incomes, so retailers are going into those ares to service those people. When Garden State Plaza expanded, everyone thought Paramus Park would go under, but the sales at Paramus Park did not feel any impact because it was a shopper that wanted to be able to go to a two-anchor center and walk in and walk out and not have to go through a huge experience. Garden State Plaza does phenomenally well because it is all about the economics and the demographic profile of the area. The density is great and the income level is high, so retailers want to be there. Xanadu will just be a different type of experience.

NREB: What about projects in the boroughs?

Zuckerbrot: Atlantic Yards is an interesting project in the boroughs, but I think the most amazing project is the Gateway project in the South Bronx, which will be about a million square feet of retail development. As well as the Harlem East Rive Plaza development, which will be unique to Manhattan.

Zelnik: Retailers are starting to see an economic and demographic difference in the neighborhoods in the Bronx. In Brooklyn, Atlantic Yards, Brooklyn Heights and Park Slope are all great locations, but there is a tremendous marketplace throughout Brooklyn that will start to develop as more projects come online.

NREB: Any aspects of the market that we have not covered?

Schwartzman: Stamford [Connecticut] is doing very well. The retail diversity is growing, attaining new highs on rents at the main intersections. Stamford is really starting to come into its own and that should continue.

Benjamin: There are a number of projects in Westchester — Bridge Hill, a redevelopment in Downtown Yonkers. White Plains has been very successful. We put a theater there and a health club for Capelli.

New Leases Signed At The Shops At Atlas Park Eleven new leases totaling 20,000 square feet have been signed at Atlas Park in Queens, New York City. Eleven new leases have been signed at the Shops At Atlas Park in Queens, New York City. Located at 8000 Cooper Avenue, the retail center, which is owned and operated by Atlas Park LLC, a division of Atco Properties and Management, sits on 12 acres of land and offers a unique mix of men’s, women’s and children’s apparel, as well as jewelry, shoes, fashion accessories, house wares, gourmet foods, and a variety of cafes, bistros and restaurants. The new leases, which includes eight retailers and two office tenants, totals approximately 20,000 square feet. New tenants include The UPS Store, Advance Health Nutrition, Chopin Chemists, Dance & Beyond, Floris Day Spa and Nails, Frankie’s Playce, M12ThirtyOne, NY Sun Club Tanning, Precise Optique, PSI Examination Services and R.K. Gupta Corp.  — Stephanie Mayhew

Construction Underway on Edgewater Square Situated between River Road and The Hudson River in Edgewater, New Jersey, Edgewater Square will offer 75,000 square feet of retail space. Leasing has begun on Edgewater Square, a new mixed-use development in Edgewater, New Jersey. Situated between River Road and The Hudson River, the project will include 75,000 square feet of retail along with 410 luxury residential units and the first LEED-certified municipal building in the state of New Jersey. Developed by National RE/Sources, the mixed-use project will comprise five buildings that mix residential and retail functions, as well as four parking garages for residents and shoppers and an 11,000-square-foot outparcel, which the developers plan to market to a bank or a drug store. “The area, which is known as the Gold Coast, has undergone a significant residential and  retail development to support a population that is growing both physically and economically,” explains David Silver, corporate director of marketing for Levin Management Corporation, the exclusive leasing agent for the site. “Shoppers from the immediate area, as well as from the affluent suburbs north of the George Washington Bridge, flock to Edgewater’s riverfront and its upscale retail opportunities.” In addition to spectacular views of Manhattan, the strategic location along River Road, which carries 43,750 cars per day, makes it an ideal location for retailers. As leasing for the project gets underway, Levin is targeting several types of retailers. “There are two locations near the river that would provide the perfect ambiance for fine restaurants,” explains Silver. “Levin is also in discussion with a number of lifestyle retailers in several different segments for the remaining space.” The leasing team is also hoping to bring in a health club at the location to drive even more business to the neighboring retailers. Construction is set to begin on Phase I first quarter 2008 with a projected completion date at the end of first quarter 2009. The remainder of the project is expected to be complete approximately a year later. The Lessard Group architectural firm is designing the facility and the engineering is being done by Keyspan Business Solutions/ Paulus, Sokolowski and Sartor, LLC.  — Stephanie Mayhew

Luxury Tower Offers Ideal Retail Space Philips International, in a partnership with The Wings Group, is also developing 10,073 square feet of retail space at 200 East 86th Street. Located at the base of the new luxury residential tower, The Brompton, the space is located on one of the most sought-after corners in Manhattan’s Upper East Side. Robert K. Futterman is marketing this facility as well. Philips International, in a partnership with The Wings Group, is developing retail space at 200 East 86th Street in Manhattan, New York City.   — Stephanie Mayhew

Stanbery Development Breaks Ground on Two New Retail Centers in New Jersey The Shoppes at Hamilton, located along Route 130 in Mercer County in Hamilton, New Jersey, will feature 150,108 square feet of retail space situated on 5.16 acres. This fall, Stanbery Development broke ground on The Shoppes at Flemington, a 149,203-square-foot shopping center situated on 19.6 acres in Flemington, New Jersey. The retail project will contain a mix of high-end tenants that are unique to the area. “There is really nothing like this in Hunterdon County at all,” says Ray Brunt, the head of leasing for all of Stanbery’s retail projects. “Flemington has always been the central trade area for the county, so it is a natural place to put tenants like this because Route 202 and Route 31 converge at Flemington Circle where the shopping center is located.” The center will feature tenants such as Talbot’s, J. Jill, Jo. S.A. Banks, The Children’s Place, Coldwater Creek, New York & Company and  a free-standing Bensi’s Italian restaurant. “The tenant mix is the key to the project’s success,” says Brunt. “The Shoppes at Flemington does not have a traditional big-box anchor. It is the synergy of all of the tenants together that functions as an anchor for the center.” In fact, according to Brunt, the catalyst for a Flemington retail center was based on one of their key tenant’s desire to be there. “About 5 years ago, Talbot’s said that they wanted to eventually do a store in the Flemington trade area because they had such a great response for mail order and Internet sales there,” he explains. Stanbery began to canvass the Flemington trade area for a viable site and eventually ground leased the property from Garden Commercial. The center is slated for completion fall 2008.  The Shoppes at Flemington, a 149,203-square-foot shopping center in Flemington, New Jersey, will feature tenants such as Talbot’s, J. Jill, Jo. S.A. Banks, Children’s Place, Coldwater Creek, New York & Company and Bensi’s Italian restaurant. Stanbery Development is also constructing another lifestyle center in neighboring Hamilton, New Jersey. The Shoppes at Hamilton, located along Route 130 in Mercer County, will feature 150,108 square feet of retail space situated on 5.16 acres. Tenants include Banana Republic, Coldwater Creek, Chico’s, White House|Black Market, Icing, Gymboree, Limited Too, New York & Company, Ann Taylor Loft, Jo. S.A. Banks, The Children’s Place, Starbucks, Salsaritas, Bensi, Lane Bryant and Clarks Shoes. The project will also include two outparcels, which are slated for Bensi’s and First Choice Bank, and a small strip center. The center is strategically located along Route 130, a major north/south corridor through most of central New Jersey, and it is in close proximity to routes 195 and 295 and the New Jersey Turnpike. Aside from the center’s proximity to so many major thoroughfares, Brunt notes that the center is in close proximity to an extremely successful power center, Hamilton Place The combination of such a successful power center down the road and the void in upscale retail provided a tremendous opportunity for Stanbery. In addition, Brunt notes that the Hamilton area is still a relatively affordable place to live in New Jersey. “Many people are able to live there and commute to New York, Philadelphia and really anywhere within New Jersey because of the road access and the large train station that was built here,” he explains. The new center is set for completion November 2008. — Stephanie Mayhew

Retail — A Key Component of Mixed-Use The Silcon Group is including a 21,000-square-foot retail component in its new 384,000-square-foot mixed-use development, Skyview at Carriage City Plaza in Rahway, New Jersey. As mixed-use development continues to sweep the nation, developers are finding that retail is a key component. The Silcon Group is including a 21,000-square-foot retail component in its new 384,000-square-foot mixed-use development, Skyview at Carriage City Plaza in Rahway, New Jersey. According to Jason Pierson of CB Richard Ellis, the exclusive leasing agent for the retail portion of the project, downtown Rahway has undergone an extensive residential and retail revitalization, and its close proximity to Manhattan and Newark make it an ideal location for retailers, residents and travelers. The retail component will include a high-end fitness center and spa, a restaurant and specialty retail on the ground floor facing the new Rahway Train Station. “CBRE is aggressively seeking tenants,” says Pierson. “We are looking for a New York City-style restaurant and for the ground floor retail we are pursuing many different types of tenants.” Designed by Nadaskay Kopelson Architects and Arturo Palombo Architecture, the 16-story mixed-use development also includes 222 condos, a 102-room Hotel Indigo and a 6,650-square-foot Phi Bar and lounge. The new train station will allow for easy access to Manhattan, Atlantic City, Philadelphia and the Meadowlands Sports Complex. “The newly remodeled train station is only 10 minutes from Newark Penn Station, which is key for travelers flying into the Newark airport,” says Pierson. “The location and the hotel will be a major attraction for the building.” Located at 77 East Milton Avenue, the project is slated for completion second quarter 2008. — Stephanie Mayhew

Settlers Ridge to Bring Upscale Retail to Robinson Township Settlers Ridge, a 600,000-square-foot regional lifestyle center in Pittsburgh, will feature a 60,000-square-foot Cinemark multiplex theater. Faison, in a joint venture partnership with CBL & Associates Properties, is currently constructing Settlers Ridge, a 77-acre retail center in Robinson Township in the metropolitan area of Pittsburgh. The approximately 600,000-square-foot regional lifestyle center will include a nationally recognized book store and sporting goods store, as well as a 40,000-square-foot health club, 120,000 square feet of home and apparel fashion retailers, 150,000 square feet of specialty stores and 65,000 square feet of select restaurants. In addition, the center will feature a 60,000-square-foot Cinemark theater and a 150,000-square-foot Giant Eagle Market District, the food purveyors new concept superstore. The Giant Eagle store at Settlers Ridge will be the third store in Pittsburgh and the first ground-up store for the company. The site lies along Parkway West, which offers retailers excellent visibility and shoppers easy access because of the newly opened Settlers Cabin/Ridge Road Interchange. According to Howard Biel of Faison, Robinson Township have become a hot bed of commercial development. “The draw for the Robinson trade area spans from eastern Ohio to northern West Virginia, but the Robinson Township marketplace was missing a high quality lifestyle collection with entertainment and restaurants,” he explains. Ground was broken on the site in October and is slated for completion in 2009. — Stephanie Mayhew

World-Wide Group Aids in Transformation of Upper East Side The World-Wide Group is offering 170,000 square feet of prime retail space in Manhattan’s Upper East Side neighborhood. At 250 East 57th Street in Manhattan, New York City, the World-Wide Group’s proposed mixed-use project will offer 170,000 square feet of retail space. Situated within a 59-story residential tower in the Upper East Side, the development will also include two new public schools. — Stephanie Mayhew

Prominent Retail Space Takes Center Stage on Broadway Robert K. Futterman is marketing 47,000 square feet of retail space at 2075 Broadway in Manhattan, New York City. Philips International and Rhodes NY, in a joint venture partnership, are currently developing 2075 Broadway in Manhattan, New York City. Also known as 72nd and Broadway, the new retail space features 47,000 square feet spanning five levels on one of the most prominent corners in Manhattan. Set at the base of a 19-story luxury apartment building, the location makes it an ideal flagship location with spectacular visibility, exposure and access to millions of shoppers annually. The space features 22-foot ground-floor ceilings and glass storefronts with 200 feet of wraparound frontage. Robert K. Futterman is currently handling the leasing for the facility. — Stephanie Mayhew

Rochester Crossing Fills Void in New Hampshire Retail The Wilder Company is currently developing Rochester Crossing, a 315,000-square-foot retail center in Rochester, New Hampshire. Construction is currently underway on Rochester Crossing, The Wilder Company’s 315,000-square-foot retail center in Rochester, New Hampshire. Located at Washington Road at Route 202 just off the Spaulding Turnpike (Route 16) at exit 13, the project sits on 50 acres and will include tenants such as Famous Footwear, maurices, Mattress Giant and Fashion Bug, as well as a Kohl’s, which opened in October, and a Lowes Home Improvement Warehouse, which opened mid November. The 69,000-square-foot Kohl’s is the first location to utilize the retailer’s newly enhanced and designed layout. The new layout features an expanded Junior’s department, spacious fitting rooms and lounge areas, updated restrooms, redesigned customer service and checkout stations. The center will also feature Rochester’s first Starbucks, which will include a drive-thru and outdoor patio seating. According to Lori McWeeney, vice president of leasing, Wilder is currently hoping to include additional tenants such as a cards and gifts store, a sports store, additional apparel retailers and a sit-down restaurant to round out the shopping center. Rochester Crossing will also feature three outparcels, one of which is already being utilized by Starbucks, and the possibility of a fourth. Rochester Crossing is part of the retail portfolio that The Wilder Companies purchased from the Flatley Company in May. McWeeney notes that the $35 million center sits right on Route 16, offering excellent highway access and visibility. “Route 16 is also a major route that takes people to the Lakes region, the White Mountains, neighboring ski areas and other tourist attractions along the sea coast,” notes McWeeney. “There is a substantial amount of growth potential in this market, and there was a huge demand for retail in the area.” Once the facility is completely leased up, Rochester Crossing will bring more than 20 new businesses to the New Hampshire/Maine trade area. The entire center is slated for delivery spring 2008. The Wilder Companies is also planning a companion center, Rochester Crossing East, on the diagonal corner across from Rochester Crossing. Development is set to begin in 2008. The companion center will comprise approximately 28,000 square feet. Staples is currently committed to 20,000 square feet with approximately 7,200 square feet still available.                                                 — Stephanie Mayhew