Last year, Esprit announced it would retrench and close all its North American stores but keep its flagship Rockefeller Center outlet open. Fast forward to this week — and you can kiss them all goodbye.
The lifestyle brand is retrenching here and in Europe in order to focus on Asia and China after its CEO reported it “lost its soul,” lost a bundle of dough and tried to sell the North American and Canadian shops.
These local store closings are creating opportunities, however, for all the building owners to bring in new retailers at increased rents.
The 14,000-square-foot store at 600 Fifth Ave. in Rockefeller Center will shut its doors this week, sources said. The store has over 1,400 square feet on a mezzanine with the rest almost evenly split between the ground and the underground mall concourse.
A rep for Tishman Speyer Properties, which operates the complex, declined to comment on a replacement.
Similarly, Esprit had subleased and is now closing its location in the never-opened Apple store at 21 W. 34th St. But sources say Esprit was paying a lower rent than what Apple continues to fork over to owner Jeff Sutton. Since retail rents are rising, Sutton probably has some retail magic up his sleeve for the heavily trafficked area. He did not return calls for comment.
In the Flatiron, Joe Fresh has already opened in the 15,000-square-foot former Esprit store at 110 Fifth Ave.
Finally, Esprit’s SoHo store is closing this week and is now on the market through Alan Grossman of ARG Realty Consultants.
The location at 583 Broadway is mid-block between Houston and Prince streets and has 8,000 square feet on the ground, 6,500 square feet on the lower-level selling floor and 7,800 square feet in a dry sublevel.
“The infrastructure is in pristine condition,” said Grossman, who is representing Amland LLC, owned by an offshore family. He declined to discuss asking rents, but Broadway ground floor rents in SoHo range between $400 and $500 a square foot.
On behalf of Amland, Grossman is also overseeing an RKF team that is marketing a space previously occupied by the Gap at 2373 Broadway on the northwest corner of West 86th Street.
RKF’s Joshua Strauss said they’re asking $300 a square foot for the ground. “Once news got out that Gap decided to leave, the interest levels went through the roof,” he said.
According to CoStar data, that space has 8,018 feet on the ground and a 4,272-square-foot selling mezzanine. Grossman said they would consider subdividing the space, which has 117 feet of frontage on Broadway that wraps around the corner and runs another 46 feet along West 86th Street.
But Grossman, along with other property owners, is “quite concerned” about the current push to down-zone and reduce the allowable width of storefronts on the Upper West Side. Thankfully for him, for now this store and Broadway is excluded.
Barbara Adler, executive director of the Columbus Avenue BID, said the group is opposed to the limited width proposal. “The [owners] have to have flexibility and be able to act quickly. If you have a 75-foot store and along come two fabulous tenants and want you to subdivide, once the store is subdivided, they are stuck,” she added.
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The Accor Group found an interesting way to finance $118 million in renovations at the Novotel Times Square at 226 W. 52nd St. Although it sold the property to Apollo Global Management and Chartres Lodging for $91.3 million — an announcement called it $94 million — documents reveal Accor, which will continue to manage the hotel, has an option to either buy back the 480-room hotel before the end of the 18-month renovation period or arrange to sell it.
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Howard Lutnick’s BGC Partners is glomming more commercial real estate players.
After a two-week exclusive negotiating period with BGC in January expired, Grubb & Ellis filed for bankruptcy this week and BGC stepped right in and bought debt for $30 million while also agreeing to buy G&E and provide $4.8 million for debtor-in-possession financing.
A competing bidder could arise, of course, and any purchase has to be approved by the court.
G&E had earlier negotiated with Andrew Farkas’ C-III Capital Partners and Tom Barrack’s Colony Capital, which had supplied the debt now purchased by BGC, but to no avail.
G&E, which was never able to become a dominant force in this area, was the first real estate services company to become publicly traded. Its yellow-and-black signs are hung on 100 company-owned and affiliate offices with 4,300 professionals, including 1,200 brokers, a management arm that covers 250 million square feet across the country and a valuation advisory service.