Real Estate

West Elm claims DUMBO plot for superstore complete with coffee spot

Founded in DUMBO on the Brooklyn waterfront, the West Elm company still has its very first store at 45 Main St. while growing its offices to nearly 60,000 square feet.

The lease for both expires in early 2016, and as more properties have been converted from light manufacturing to residential, there is now a space crunch.

During a lunch, brokers Mark Finkelstein, president of Retail Strategies and Chase Welles, a partner with SCG Retail, began discussing the lack of opportunities for Finkelstein’s client, Williams Sonoma, the parent of West Elm.

Welles asked Finkelstein to come to his next meeting with someone who wanted to respond to an RFP being put out by the Brooklyn Bridge Park for the historic but vacant Empire Stores on the nearby DUMBO waterfront.

This series of seven vacant former and now dilapidated coffee warehouses dated from the Civil War and composed 327,000 square feet.

The developer, Midtown Equities, already had what the brokers considered a “beautiful rendering” from project architect Jay Valgora, of STUDIO V Architecture, and a “terrific” proposal with a glass addition to the rooftops.

They knew any responder with a tenant in hand would have a better chance of winning and obtaining financing.

The huge amount of available space was also an added bonus for West Elm, as it could have both its store and offices under the same roof, have a laboratory to try out new products and have plenty of future expansion space.

Within 30 days of the first meeting, the brokers were negotiating a lease, which resulted in a 20-year deal for 140,000 square feet for offices and 10,000 square feet of retail, where they expect to move in 2016. Along with a West Elm it will include a West Elm Market store, a coffee shop and communal space created in partnership with La Colombe.

Midtown Equities, along with its partners Rockwood Capital and the HK Organization, then bested nine other proposals to win the RFP. They signed a 96-year lease with rent that begins at $1.5 million per year to the BBP, and with input from the local community, are now proceeding with final designs for the $150 million, 450,000-square-foot redevelopment of 55 Water St.

The development is expected to include a Brooklyn-centric museum and have sprawling outdoor public spaces, including a green roof terrace with unobstructed views of the city skyline.

Along with offices, retail and restaurants, the plan includes the creation of a dramatic glass-topped addition to the low-rise four- and five-story buildings.

While West Elm’s rent was around $40 to $50 per foot, the brokers declined to discuss new pricing, especially as an anchor tenant usually gets a better deal. Office asking rents now range from $65 to $90 per foot, with restaurants and retail asks ranging from $125 to $150 per foot, depending on location and views.