Brookfield Office Properties is looking to use its swanky retail space at Brookfield Place in Lower Manhattan as a lure to attract office tenants. After a $250 million overhaul of the 250,000-square-foot retail space, Brookfield hopes that high-end tenants such as Hermès and Burberry will appeal to potential office clients and convince them to fill the 8.5 million-square-foot office space.
“A lot of what we are creating downstairs is to create value upstairs,” David Cheikin, Brookfield’s vice president of the New York region, told the Wall Street Journal.
Base retail rents at the tower are between $200 and $600 per square foot, representatives for the real estate investment trust told the Journal. In comparison, the average base retail rent in Lower Manhattan in the third quarter of 2013 was about $277 per square foot, according to Cushman & Wakefield data seen by the newspaper.
Brookfield is on track to fully lease out the retail space at the property, company executives added, but the building’s success will ultimately depend on its ability to snag office tenants, John Bejjani, an analyst with Green Street Advisors, told the Journal. “Granted, retail space commands higher rents,” Bejjani said, “[but] you are comparing about nine million square feet to a couple of hundred thousand square feet of retail space.” [WSJ] – Hiten Samtani