“We’re now seeing pressures even on luxury retailers”: Blackstone

Nadeem Meghji said he didn't expect them to occur "as fast as it has”

TRD New York /
Jul.July 18, 2017 02:34 PM

Struggling Fifth Avenue stores (credit: Getty Images) and Blackstone’s Nadeem Meghji

A senior Blackstone Group executive believes the state of the U.S. retail market is worse than expected.

“The retail industry is clearly facing headwinds. And it’s the first time we’ve seen secular rather than cyclical headwinds,” Nadeem Meghji, Blackstone’s head of North American real estate, told the Financial Times. “We’re now seeing pressures even on luxury retailers, which I didn’t expect to happen as fast as it has.”

Blackstone still owns grocery-anchored shopping centers but has sold off its malls.

“The internet has made the value proposition for a lot of shopping malls less relevant,” Meghji added. “If you add in the factor that they actually tend to have higher operating costs due to security, electricity and so on, then they are high-cost rental spaces for retailers.”

Manhattan’s high-end retail market has been struggling with rising vacancies. According to Cushman & Wakefield’s most recent market report, six of Manhattan’s twelve top retail markets have availability rates of 20 percent or more. Ralph Lauren recently shuttered its Fifth Avenue flagship store, and as The Real Deal reported last week sales at Apple’s store at the GM Building fell over the past three years.  [FT]Konrad Putzier


Related Articles

arrow_forward_ios
Clockwise from top left: 312 West 34th Street, 61 North 9th Street, 639 Classon Avenue, and One Fulton Square (Credit: Google Maps)

These were the top 10 NYC retail leases in July

When it comes to retail, “real estate in New York is fundamentally broken”

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Here’s a look at Blackstone’s industrial plays after its record-breaking portfolio purchase

From left: Jonathan Gray and Steve Schwarzman with Stuyvesant Town

Behind Blackstone’s “capital strike”

October Issue is Live

The Real Deal‘s October issue is now available to subscribers!

Blackstone buys Colony Capital’s warehouse portfolio for $6B

Council member Vanessa Gibson (Credit: New York City Council)

Commercial landlords face new fines as City Council passes anti-harassment bill

arrow_forward_ios