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Brookfield to incubate new retail ideas with Bleecker Street portfolio
Company snapped up properties at a discount
Brookfield Property Partners is planning on conducting something of a retail experiment with the portfolio of properties on Bleecker Street it bought from New York REIT for $31.5 million.
The global investor plans to create an incubator for emerging online brands or new retail concepts to get a feel for the market and try out their brick-and-mortar strategies, the Wall Street Journal reported.
Brookfield is also reaching out to other owners on the shopping strip to come up with a plan for reinvigorating the street, and plans to bring cultural events and art installations to its properties through its Arts Brookfield division.
“There’s a lot of vacancy, and we love that,” Brookfield Properties head of retail leasing Michael Goldban said. “We want this to be a testing ground.”
Brookfield paid $31.5 million to buy four retail properties with seven storefronts on Bleecker Street from New York REIT, which had spent nearly $45 million acquiring them between 2010 and 2012.
It’s an attractive area because of foot traffic and interest among tourists, but sales never justified rents that peaked at about $500 to $600 a square foot, CBRE’s Richard Chodos said. Rents are now between $300 and $600 a square foot and many of the retail owners in Greenwich Village bought at the top of the market and have been holding out for high rents.
It’s not Brookfield’s only opportunistic bet on retail at a time when the sector is still reeling from the disruption of online shopping and speculative investment that drove valuations and rents to untenable levels.
Brookfield also recently reached a deal to buy the remaining 66 percent of shares it didn’t already own in mall REIT GGP for $23.50 a share, which was below the $24 per-share price many investors and analysts thought the company would get.
Goldban said the company’s basis on Bleecker Street allows it to be more creative with the properties.
“We have the comfort to experiment because we’re getting an attractive price,” he said.
As of February, there were over 100 vacant storefronts in the West Village/Greenwich Village area. [WSJ] – Rich Bockmann