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NEW YORK ROUNDTABLE 82 • SHOPPING CENTER BUSINESS • December 2016 Garcia: New York has an opportunity to be attractive to international retailers now. The cocktail needs to change. If we change the requirements, I think now is a big opportunity to say 'New York is the place.' It's not as easy as opening doors and selling product; you need to think about how you build your experience, and New York is a perfect place to build an experience. Campione: I was just going to ask as the devil's advocate… is New York really the right place for Europeans to launch first? I think, if I'm going to have another of- fice it's Los Angeles. Where did Primark come? It didn't land in New York first, it landed in Boston. Garcia: Primark is a different animal. It is discount. Campione: I think for a company like Pri- mark or H&M; or any of those discount- ers, I think they could've gone to Boston, Philadelphia, Cincinnati, Austin and just avoid New York. Why pay the New York rent? Why fail in the hardest city to suc- ceed in? Garcia: I will answer very easily. Forget about H&M; and Zara, put them aside. Imagine a brand comes to America; an average, medium-sized company with 70 stores in the world; an average fashion brand. Tell me how many places in Ameri- ca combine the foot traffic — because you need 1,500 people per hour on average — and demographics, including malls, that you can find besides New York? Campione: My counter argument to that would be foot traffic, and it goes back to the question that we're making is it the same trip when you go to a restaurant as when you walk over to Ann Taylor and buy a black dress at the same center — foot traffic doesn't equal sales. We sat at this roundtable four or five years ago coming out of the recession or right in the middle of the recession and discussed whether tenants in Times Square were there for marketing or for actual sales per square foot. As people started to say, 'well, no longer do they want those stores to sur- vive just on a marketing dollar and those stores have to start to make money' be- cause we came out of the recession. Jackson: No, but if you have density like Sever [Garcia] is talking about, hopefully a portion of that is the right foot traffic, and obviously if a retailer or developer is coming in there, they're not going to go to a place that isn't going to be effective. You look at a location, and you can say, 'boy there's a lot of traffic' but they're not going to buy my kind of goods. There is a balance there — we love our submarkets in Manhattan and in New York City and there are so many great markets — but what works is that everyone has a person- ality; each one has a personality; each one has density, and that's what makes New York somewhat different. We have a great population base and a great employment base, and we have tourism, but not every submarket or neighborhood is going to be effective for everyone. If you have no traffic, sure, if you've got someone that comes in once a week and pays $10,000 for a tablecloth, maybe you can get by, but you need a certain amount of foot traffic even if some of that foot traffic isn't effec- tive and buying. Garcia: If you don't have foot traffic, you need to replace the consumers going into your store by another thing. You can invest in marketing, but if you don't have traffic, you need to find ways to attract consum- ers to your retail. You need to have a cer- tain amount of foot traffic to open a store. There are not many places in America that offer the density of New York City. Kampler: The real answer is the sign of vi- ability for the future is different today than when we spoke post recession. We sat here in 2010, 2011 and 2012, and we were seeing the emergence of these landscape that had a Wall Street-sized main event. What we're seeing today is a recasting of shopping behavior that is permanent and not tied to an economic market. It is the largest class of buyers and the highest pur- chasing power of millennials who have to- tally shifting consumer preferences from goods to travel and experience. My kids aren't shopping as much because they live in small places and their guru wears a hoodie to work instead of a tie. Millenni- als don't have cars, they're Zipcar-ing it all over the planet and they don't need garag- es, so they don't need those tools in their garage. It's an entirely different thing. I look downward and I see my kids. I look upward and I see my mother. We're going through all of their stuff and throwing out what could have been a fabulous inheri- tance into trashcans because they didn't stop accumulating until 63. Now we see our parents getting rid of their stuff, our kids not buying stuff — I don't know about anyone else around this table, but I think that is having a gigantic effect, so far un- recognized by the media. I think this is a trend. We are seeing from both ends people who should have bought less, are now buying less and so we're saying why am I buying this stuff now? It is having a huge actual impact on our segmentation and demographic as well. When you see all of that, you know that it's not just Wall Street from 2007 to 2010. We're in a dif- ferent era. Cohan: I would say that we're in an era where we're very stressed. Everyone at this table, would everyone agree that they're working harder than ever? When we talk about food and beverage, what my retailers are telling me is that that's going to be growing. Whether you're in fashion or jewelry or athletic footwear, they're telling me not only do they need a cappuccino bar, but they need the wine bar, and while they camouflage it to make the sale, if somebody wants a Corona or a Stella, they'll pull that out of a cooler. I think people are stressed and we're seeing retail like people going to a theater where no one is even watching a movie. People need to relax. From left, Scott Plasky, Marcus & Millichap; John Swagerty, Acadia Realty Trust.