The Real Deal New York

Amazon’s bookstore is just a
“shitty Barnes & Noble”: Richard Wagman

REBNY members discuss challenges facing retail
By Rich Bockmann | October 18, 2017 04:35PM

From left: Madison Capital’s Richard Wagman, Colliers’ Brad Mendelson, Brookfield’s Michael Goldban, Eastern Consolidated’s Robin Abrams and Amazon Books in the Time Warner Center (Credit: Getty Images)

Experiential retail is touted by many as an antidote to the disruption wrought by the internet and e-commerce. But some of that retail isn’t providing much of an experience.

“Amazon’s a great example. They put almost every bookstore out of business and then they opened up a bookstore in Time Warner Center and it’s horrible,” Colliers International’s Brad Mendelson said Wednesday afternoon at the Real Estate Board of New York’s member’s luncheon.

“Amazon said, ‘You have to see our store at Columbus Circle. It’s a real experiential store,’” Madison Capital managing partner Richard Wagman added. “I walked into the store and I was like, ‘Actually, it’s kind of a shitty Barnes & Noble.’”

Mendelson said he’s been busy in Times Square – which led retail leasing activity in the third quarter, according to CBRE – where Gap and Old Navy have been putting the finishing touches on their new stores at 1514 Broadway. But the broker, who represented landlord Bow Tie Partners in the deal, said the tenant didn’t elevate the space to the kind of destination many feel would be needed to make a statement in today’s retail environment.

“Old Navy opened up and it looks like they’re on 34th Street,” Mendelson said. “We think they missed an opportunity.”

REBNY’s panel, which was moderated by Eastern Consolidated’s Robin Abrams and included Michael Goldban of Brookfield Office Properties, touched on many of the challenges facing the industry as it deals with declining rents and a glut of availabilities.

The panelists were split on whether the current challenges are cyclical (a matter of the normal climb and fall of rents) or secular (having to do with larger forces outside the real estate industry).

They agreed, though, that landlords have been getting more creative in providing tenants with financial incentives in order to push up their rents, a trend The Real Deal reported on in September.

“That was landlords buying up the rents because they need to get a particular number,” Abrams explained.

“There have been financially engineered transactions where rents don’t make any sense,” Mendelson said. “And I talk to the bankers who finance these deals and they’ve become aware of this and they’re not loaning at the levels they used to loan. If they’re loaning at all.”