From left: Lansco Corp. agents Robin Abrams, Howard Dolch and Lisa Rosenthal in front of 530 Fifth Avenue
Trying to squeeze into a size that’s too small doesn’t usually work — whether it’s a person dressing for a night on the town, or a retailer looking for its flagship site. Yet with a creative tweak, clothing retailer Syms managed to wriggle into a new Fifth Avenue storefront it badly wanted.
The apparel company liked the retail space at 530 Fifth Avenue, but thought it was just too petite. To get around that, Syms’ brokers, along with landlord Joseph Moinian, arrived at the idea of also leasing a piece of second-floor office space.
Unfortunately, the office space on the second floor did not connect with the available retail space. “It was kind of far-fetched. We had people punching through bathrooms,” said Robin Abrams, executive vice president at Lansco Corp., which represented Syms and won the top retail award from the Real Estate Board of New York last month for orchestrating the tricky deal.
There were more complicating problems. For one, the spaces were at different heights in the building, and there were elevators needed for upper-floor office tenants that could not be altered. Also (and perhaps the most time-sensitive of the problems to surmount): The approximately 10,000 square feet of office space that Syms needed was about to be leased by someone else.
However, Syms — which in 2009 bought discount chain Filene’s out of bankruptcy — was motivated, facing an expiring lease at its five-floor, 70,000-square-foot store at 400 Park Avenue, to make a move.
The retailer had been in its Park Avenue location on the corner of 54th Street since 1994. It had to either commit to a five-year extension or find a new home. So, in the spring of 2010, with its team of Lansco brokers — Abrams, Howard Dolch and Lisa Rosenthal — it began looking for alternate locations.
Lansco convinced the retailer that it should move to Fifth Avenue below 48th Street, where Cushman & Wakefield reported that in the first quarter ground-floor rents on average were about $595 per foot, compared to $2,067 per square foot north of that dividing line. Fast-fashion stores like Zara (at 500 Fifth Avenue) and H&M (at 505 Fifth Avenue), both on 42nd Street, had moved in over the past few years.
Store executives liked 530 Fifth Avenue, which Moinian bought in 2004, but the space, which was spread over the ground floor, the lower level and mezzanine level, was only 22,000 square feet, according to marketing materials from Moinian’s brokerage, Winick Realty Group. That was 13,000 square feet shy of the 35,000 square feet Syms wanted.
The available space did have 45 feet of Fifth Avenue frontage. The adjacent corner spot in the building was (and continues to be) leased to a JPMorgan Chase bank branch. To the north of Chase was the available space, which had a mezzanine level. And to the north of that, on the second floor, was the office. The problem was that the mezzanine and the second-floor office didn’t connect.
“[The 22,000 square feet] was what we were given, but we said this isn’t big enough. What can we connect to make this usable for our clients?” said Rosenthal, a director at Lansco.
Also, Lansco agents were soon told that there was an interested office tenant for
the second-floor spot, and a lease deal was imminent.
Moinian’s agents — Lori Shabtai and Darrell Rubens — realized that they could hold on to Syms and get better terms for that space, so they hastened to call the office deal off.
Still, to make it work for Syms, the mezzanine had to be connected to the second-floor space. That required serious construction, including the demolition of several bathrooms, and an extension of the mezzanine space further out into the store to get it to line up with the office. The price tag: more than $1 million.
There was an 11th-hour deadlock over who would take on the construction job. (City property records show that Moinian agreed to spend $1.5 million.)
Syms’ annual rent was not disclosed; however, the two parties signed the 35,000-square-foot deal last August. Syms plans to move there in the fall. According to Lansco’s Dolch, the final contract ironically includes an option to lease a third-floor office space if it becomes available in the future — so the clothing store may soon be able to loosen its belt even further.