Shopping Center Business is the leading monthly business magazine for the retail real estate industry.
Issue link: http://shoppingcenterbusiness.epubxp.com/i/752067
NEW YORK ROUNDTABLE 74 • SHOPPING CENTER BUSINESS • December 2016 things and how they drive traffic and cre- ate experience. The first is, in the store, what can you do that's different? If you've got a few thousand stores, we don't want to put the 5,000th store in our center, but if you do something different we like that. As an example, we just did a deal with Al- len Edmonds and we said 'what can you do special?' They completely redesigned their store; they're going to have their first ever concept where you can go into their store and have a wall of materials and you can design your shoes from scratch. This was something you could only do online before. That was pretty cool. Starbucks Coffee wanted to do something, and we said we already have a Starbucks on the other side of the complex, what can you do that's unique? They came back with a 4,000-square-foot, Starbucks Reserve bar with wine, beer and a special food menu. This is driving the retailers to do something that is unique so that people want to seek that location out. Second- ly, we want to embrace technology. For Manhattan West, how could we create an application that the entire mixed-use de- velopment — whether it's retail, residents, office workers — can get whatever you want here. Recently we partnered with Ritual which is kind of the Uber of food pick-up. We had some issues with Hud- son Eats at lunchtime getting so crowd- ed that it was a deterrent to people to go and pick up lunch there. With Ritual you can order on your phone and it tells you when your food is going to be ready. You go down, pick it up and it pays through the app. That's been great. Lastly, our arts and events program is one of the largest in the city. We realize we can't just open the doors to a store and expect people to come in; we have to give people a dy- namic experience. Whether it's large or small events — we had the America's Cup down at our harbor and we have a music festival every summer on the waterfront — it's just raising the awareness and giving people a bigger reason to come and enjoy the setting. Graiser: How do you make the determi- nation on how many restaurants are too many restaurants? One of the issues we're starting to see, because we are getting calls from restaurants, is just too many restau- rants. Certain landlords are saying we've gone too far with too many restaurants. Where do you draw that line? Kostic: Brookfield Place is a little bit unique because we have 45,000 office tenants, as well as residents and traffic from the waterfront, so it's a lot of peo- ple and the demand is not as much of an issue there. At One New York Plaza, we just did a $14 million redevelopment and we have probably seven or eight eat- eries. While Water Street in and of itself is a micro market — it's got some of the biggest buildings in New York City — the restaurants are there primarily to serve the building. Obviously, if you put too much food in, you're really cannibalizing, so we're being conscious there. Rabinowitz: Let's talk a little bit about department stores. One of the trends we're seeing is that department stores seem to be doing well, but they're very challenged and some of them are doing some very interesting things. Sever [Gar- cia] is working on an interesting project with one of them. Sever Garcia: We talk about food and entertainment and I am more in the tra- ditional retail as I'm in the fashion indus- try. With traditional retail, the challenge is creating an experience. Soon, we're going to open 55,000 square feet with 14 new European brands all together, and we be- lieve that in and of itself is an experience. We're going to offer to middle America the option to really have exposure to 14 international retailers within the store. We're taking a piece, like 11,000 square feet in department stores in the New York area, not in the city. Stephanou: Retailers are making invest- ments in companies. Look at Trunk Club, which Nordstrom bought; department stores are trying to find ways to make the store experience more exciting. Someone had mentioned that Apple is going to take the space at Macy's. They'd wanted to do a store on 34th Street for a long time and I guess that was a solution that worked for them and also worked for Macy's. Kampler: What Sever [Garcia] is describ- ing is almost like a World's Fair within a department store, more than it just being an investment. This is more a multi-brand, interactive, synergistic — a little flavor of pop-up, a little flavor of kiosk, and a big flavor of World's Fair. Rabinowitz: It's a master lease concept, but it's not a food hall; it's a collection of European retailers. Campione: Back to the department stores, I think what you're talking about with the store within a store — that's how Macy's has been forever. One of the prob- lems with department stores today is the fact that the major corporation owns the brand and has watered down the brand. You can go to some stores today and get everything. The idea that they've taken a brand name and brought it nationwide; that there's an A store, a B store, a C store. The fact that you can go to a store in an- other city and all of a sudden find they don't have the same offerings, like a men's shoe department. That's what I think is hurting the department stores. That does trickle down to the suburbs and why malls are losing their anchors and going, 'well how do we carve it up into TJ Maxx and others?' We're so used to going to a brand name department store because it always carried the same things. That's one of the things that Target does so well. While they were cookie cutter, you found the same product everywhere on the right side of the store and the left side of the store. When I go to certain department stores, I can't return my dress at one location because they don't have a ladies' dress department because they consider it too fancy in that market. Jackson: The problems with depart- ment stores are different depending on the chain. Certain department stores acquired other chains, so they ended up with often two in the same center: many converted the second store into a home store or a separate men's store. It's like with everything in retail; if you're an own- er and you own the best, the Macy's/ Sears situation is an opportunity for you because they're not paying rent and if they are paying rents, they are low. They gen-