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JCPenney takes 153,000-square-foot bite out of the Big Apple

JCPenney store in Manhattan Mall

JCPenney cut the ribbon on its first Manhattan store today in the Manhattan Mall, and it's poised to be its highest-volume location, said Mike Ullman, chairman and CEO of the department store chain, following a press preview headlined by Mayor Michael Bloomberg.

JCPenney signed a lease for 153,000 square feet for "more than 10 years," to be the anchor tenant in the 500,000-square-foot Manhattan Mall at 33rd Street and Sixth Avenue, Michael Dastugue, senior vice president and director of property development, told The Real Deal.

The store occupies three lower levels, including two floors of selling space and a third level with offices and a stock room.
 
Vornado, which brokered the lease, offered JCPenney an opportunity to take over the entire Manhattan Mall, but the retailer opted against it, Ullman, the CEO, told The Real Deal.

"It helps to make it more affordable" to be the anchor tenant, he said. "Anchors don't pay as much rent" in a mall as other stores. Officials would not divulge the rent.

Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail leasing and sales division, estimated that JCPenney is paying in the neighborhood of $100 per square foot for the space.

"Rents in that area today, if street level only, would be $300 a foot versus $500 a foot three years ago," she said.

Depending on how the Manhattan store performs, JCPenney would consider opening another store in Manhattan and even Brooklyn, where it has yet to venture, executives said. The retailer currently operates three other New York City stores: one each in Queens, Staten Island and the Bronx.

For JCPenney, which has over 1,000 stores, the Manhattan store marks a coming home of sorts. The retailer's corporate headquarters was located here for 75 years until moving to the Dallas area in 1988.
 
And the building the store now occupies is rich with department store history. It originally housed Gimbels department store, then Abraham & Straus, and then Stern's, which closed in 2001.