With more and more affluent young families opting to stay in the city rather than flee to the suburbs as was typical of previous generations, retailers are attempting to capitalize on New York City’s growing kids’ market. Real Estate Weekly took note of the tot-centric shops that have recently sprung up across the five boroughs, among them, Brooks Brothers’ first children’s store in Manhattan, located on Madison Avenue and 86th Street, and the New York Kids Club play center, which has opened five Manhattan locations over the past decade and is now looking to expand in Brooklyn. Meanwhile, kids’ clothing retailer Giggle, which already has stores in Soho and on the Upper East and Upper West sides, is hunting for new sites in Long Island City. [more]

For New York City real estate, 2010 in many ways marked a return to normalcy after the tumultuous aftermath of the financial crisis. As the ubiquitous real estate appraiser and Miller Samuel CEO Jonathan Miller put it: “it was a year of a sense of relief.” City home prices stopped their freefall and sales activity improved considerably from the post-Lehman doldrums. Stalled condominium projects like the Sheffield and 1 Rector Park re-started sales. Mexican billionaire Carlos Slim bought Tamir Sapir’s Fifth Avenue townhouse, the Duke Semans mansion, for $44 million. As the unspoken taboo on ostentatious spending faded, a number of high-end residential properties changed hands at the end of the year, including Brooke Astor’s 14-room duplex at 778 Park Avenue, which finally sold after two years on the market (albeit for a significant discount from its original asking price). Japanese retailer Uniqlo snagged 89,000 square feet at 666 Fifth Avenue’s former Brooks Brothers space for a record $300 million, demonstrating that retail is still thriving along the posh shopping corridor.
But the economic downturn continued to make its presence felt. The office market remained uneven and troubled lender iStar Financial fought to stave off bankruptcy amid lingering fears of a double-dip recession.
Here are The Real Deal staff’s picks for the stories that most altered the New York City real estate landscape in 2010, in alphabetical order. [more]

The announcement that discount store Century 21 will replace Barnes & Noble at 1972 Broadway opposite Lincoln Center is bucking the trend of upscale retailers moving in on the Upper West Side, Stuart Elliott, editor-in-chief of The Real Deal, told WNYC. With rents down around 30 percent, the deal follows new retailers such as Apple, Brooks Brothers and West Elm moving into the area, he said. Elliott believes that Century 21 will be a good fit for the Upper West Side, going along with the trend of discount retailers expanding throughout the city. “People are looking for a bargain these days,” he added. The closing of the Barnes & Noble is a “casualty of the recession,” Elliott said, adding that there will likely be more Barnes & Noble closings ahead, as there have been with Starbucks and Virgin Megastore in recent years. [WNYC]

[more]

From left: Charles Kushner, chairman of Kushner Companies; company principal and son Jared Kushner and 666 Fifth Avenue

It’s been a good week for the Kushner Companies at 666 Fifth Avenue, the 41-story office tower between 52nd and 53rd streets. Japanese retailer Uniqlo recently signed on to pay a record $300 million over 15 years for the building’s 100,000-square-foot retail condo that formerly housed Brooks Brothers. Today, the Post reports that energy-focused law firm Vinson & Elkins has renewed its lease and taken an additional 6,972 square feet, bringing its total to roughly 81,000 square feet at the property. The firm’s original lease was set to expire in November. Last year, law firm Orrick Herrington left 666 Fifth Avenue, putting Kushner in a bit of a crunch as it negotiated with its special servicer, something the company contends was their choice and was not due to a default.
[Post]

Japanese retailer Uniqlo has snagged 89,000 square feet at 666 Fifth Avenue’s former Brooks Brothers space for a record $300 million over 15 years, Bloomberg reported. Uniqlo, which is owned by Fast Retailing, Japan’s largest clothier, and also has a location in Soho, will pay roughly $20 million per year for the lease on what will be its New York flagship. The asking price for the space was reportedly $30 million per year. C. Bradley Mendelson of Cushman & Wakefield represented the landlords, Kushner Companies, Crown Acquisitions and Carlyle Group. [Bloomberg]

Even East Hampton’s most luxurious retailers are having a difficult time keeping up with their rents on the island’s posh shopping strip, and some are going so far as to give up their coveted spots. Gucci, Brooks Brothers, Cole Haan and Calypso Home are among the stores ditching their pricey digs in advance of the typically busy summer season. With rents as much as $200 per square foot, retailers have always struggled to turn a profit in East Hampton, but brokers say that in normal economic times, brands were willing to take the loss. “The chains want an East Hampton store just for advertising, to be able to put it on their letterhead,” said Lee Minetree, a senior vice president at Saunders & Associates. Now, priorities have shifted and there are close to 30 shuttered storefronts on East Hampton’s main shopping stretch. [Post]

Charles Kushner (left), head of Kushner Companies, and 543 Madison Avenue

While many troubled retailers are using Chapter 11 protection to cancel
leases, bankrupt retailer Hartmarx was paid $11.8 million by its
landlord to terminate a below-market lease at the prime Midtown
location of its subsidiary, men’s clothier Hickey Freeman, at 666 Fifth
Avenue. A partnership of Crown Acquisitions, the Carlyle Group and Kushner
Companies paid Hartmarx the multi-million dollar fee to terminate the
lease at its location in the retail portion at 666 Fifth Avenue,
between 52nd and 53rd streets. The office portion of the building is
owned by Kushner Companies. The partnership bought the leasehold June 4, city property records
published this week show, months after Hartmarx filed for bankruptcy
protection in Illinois in January. The lease was signed in 2000,
expired in 2016 and had an option to extend another five years,
bankruptcy court records show. By Adam Pincus
[more]

Uniqlo (left) and Topshop (right) are interested in the old Brooks Brothers space (center)

According to the Post, downtown retailers are interested in the former
Brooks Brothers site at 666 Fifth Avenue, at 53rd Street. Sources said
the two front-runners to take the 30,000-square-foot, two-level space
are Uniqlo and Topshop, which both have locations on Broadway in Soho.
The building’s retail space is owned by a partnership of Kushner Cos.,
Crown Acquisitions and the Carlyle Group. The partners bought Brooks
Brothers out of its below-market lease last year for $47 million. The
asking rent for the space is reportedly $30 million a year. [more]

For proof that the recession has pummeled retailers in upscale areas, consider the fate of East Hampton. By January, brokers say, an unprecedented half-dozen stores were
shuttered along Main Street and Newtown Lane in the town, which is the
heart of the Hamptons, the tony summer getaway on Long Island’s Eastern
End. Worsening their situation, landlords on those streets, which brokers say can command
up to $200 a square foot, for months have seemed reluctant to lower prices to fill
empty berths. But now, with summer just weeks away, property owners are relenting;
they’re offering dramatically shortened leases to lure penny-pinching
tenants. These leases, which historically lasted 10 years, can now be
had for as short as five months. [more]