Google has agreed to pay $600m to acquire a historic building in Manhattan’s Meatpacking District — a hundred times what it was sold for in 1996 — in a deal that reflects the tech company’s growing footprint in New York City.
For Doug Harmon, one of the agents who brokered the sale, it represents a career milestone: Mr Harmon has sold 450 West 15th Street — also known as the Milk Building — five times in a career that has spanned New York’s latest real-estate boom.
“Longevity is a brutal competitive advantage!” quipped Mr Harmon, the chairman of capital markets at Cushman & Wakefield.
The first time he sold the building, in 1996, the cobbledstoned neighbourhood was a gritty outpost with a reliable supply of transgender prostitutes and illicit drugs. It went for $6m to Moishe Mana, an Israeli immigrant who grew wealthy after founding a local moving company, Moishe’s Moving, and his partner, Erez Shternlicht.
Under their ownership, the eight-storey industrial building led the neighbourhood’s turn toward trendy fashion and media companies, including their Milk Studios.
In 2004 Mr Harmon helped them sell the building to investment firm Angelo Gordon for $55m, and then flipped it four years later to Stellar Management for $161m, who then shifted it — with his assistance — to Jamestown, a developer, in 2013 for $284m.
Now comes Google, whose $2.4bn purchase of the nearby Chelsea Market last year reinforced the neighbourhood’s status as New York City’s technology capital. It also helped to cement Mr Harmon’s standing as one of two uber brokers in a real estate-obsessed city.
The other is his arch rival Darcy Stacom, the so-called Queen of the Skyscrapers at CBRE, who advised Google on both acquisitions and regularly battles against Mr Harmon in New York’s favourite blood sport.
“They’re rock stars. They’re simply the best at what they do,” said Craig Deitelzweig, chief executive of New York-based Marx Realty.
For Mr Harmon, a born talker with a touch of showbiz panache, the Milk sale is evidence that there is still juice in the city’s real-estate market — even after a prolonged run whose sheer duration has set many executives on edge, with a sharp retreat of Chinese buyers and a fall in prices for luxury condominiums.
In one sign of the market’s fragility, brokers have taken to selling some buildings privately, approaching potential buyers without making a formal listing to avoid the risk of disappointing headlines.
Rising US interest rates would cause some dislocation, Mr Harmon said. But overall, he argued that New York’s property market was stronger than many sceptics realised — particularly for those who understood how to navigate it.
“This is the market that distinguishes one’s self — show’s one’s skill,” said Mr Harmon, who is also in the midst of closing a $2.2bn sale and leaseback of WarnerMedia’s headquarters at the new Hudson Yards development. “It’s my kind of market.”
The son of a theatre producer and investment banker, Mr Harmon was not entirely sold on real estate after graduating from Brown University in 1984 with a psychology degree. At the time, everybody wanted to be in investment banking, he recalled. He went to London and worked for the Ladbrokes betting parlours — a chain with big real-estate holdings — dabbled in Hollywood and then earned an MBA from UCLA in 1992.
His career was transformed in the late 1990s when a man at a dinner party in Anguilla, where his family vacationed, passed on a tip: Leona Helmsley — Manhattan’s infamous Queen of Mean — was looking to unload a $5bn property portfolio she had inherited from her husband, Harry. Mr Harmon, then 35 and a little-known broker at Eastdil Secured, snagged the mandate.
Mrs Helmsely was so difficult and unpredictable that some at Eastdil did not want the business. So Mr Harmon set up a separate operation within the firm to handle the sale. “Everything hung in the balance,” he recalled. “She could fire you on a whim.”
In addition to burying himself in paperwork, Mr Harmon also put his psychology degree to work. At one point he gave Mrs Helmsley a dog, a Maltese, to whom she would later leave a $12m inheritance. Mr Harmon also became her regular companion at the Four Seasons restaurant, where he eventually discovered that the $10 bills Mrs Helmsley regularly demanded of him to tip the bathroom attendant were not making their way to the intended recipient.
“It was a training ground for the craziness that exists in real estate,” he said.
That three-year assignment introduced Mr Harmon to properties he would trade again and again in his career, just as he has the Milk Building. It also thrust him into a new orbit of buyers and sellers and trained him in the poker game of big auctions.
“You always have to convince someone of something — in a smart way, being truthful,” Mr Harmon said of his approach. (His other tips: “Never let the leverage shift away from the seller” and, if you can, avoid due-diligence at all costs).
Meanwhile, his “sport”, as he calls it, was being transformed from a somewhat disreputable undertaking to a matter of public fascination.
“In the mid-90s, real estate became an industry that everyone was interested in,” Mr Harmon said. “It’s money, it’s the power, it’s everything — and then you get New York.”
Doug Harmon at a gala in New York in 2016
He parlayed his Helmsley experience into the 2003 sale of the GM building to Harry Macklowe for a then-record $1.4bn. For the next decade, his Eastdil team vied with Ms Stacom at CBRE for dominance of the New York skyline. She sold GM for $2.8bn in 2008. They took turns selling the massive Stuyvesant Town and Peter Cooper Village development — she for a record $5.4bn in 2006, just before the financial crisis, and he for either $5.3bn or $5.45bn in the boom year of 2015, depending on who you ask.
After a performance by his Eastdil team that year that Mr Harmon described — with characteristic restraint — as surpassing Goldman Sachs, the New York Yankees and Tiger Woods, he decided the old model no longer worked.
His thesis was that the industry was changing as it drew in more money from private equity firms, pension funds, sovereign wealth funds and the like. “What is happening in the market is this institutionalisation of our sport,” he said. “It’s not just for the cowboys, it’s not just for the people who didn’t go to college, [those] who came up through the streets and had to fight their way.”
To appeal to the new players, Mr Harmon believed he needed to come armed with reams of data and research — about rent trends and retail sales on individual city blocks. In 2016 he and his team jumped to Cushman, a perennial laggard in the New York market but blessed with a big international network as well as leasing agents and investment advisers who could provide market intelligence.
His involvement in WarnerMedia’s pending transaction at Hudson Yards is a good example. While at Eastdil, Mr Harmon brokered the company’s $1.3bn sale of its Time Warner Center headquarters in 2014 to The Related Companies, the site’s original developer.
He reckoned Related would be willing to pay more than others to boost its chances of luring the media company to Hudson Yards, a mega-development it was then still building in an otherwise desolate part of town. Time Warner ended up taking 1.5m sq ft there at a bargain price.
Five years later, Hudson Yards is a commercial success, and Time Warner’s new owner, AT&T, which is eager to pay down debt, is looking to benefit by selling the space back to Related for $2.2bn and taking out a 15-year lease.
“That’s the beauty and the detriment of my sport,” Mr Harmon reflected. “It’s really, really hard to tell who’s better than the next person. And that’s why you have to look at the whole body of the work.”
This article has been amended since publication to correct the value of the 2004 sale to $55m.
Henderson of Marx Realty leases 25,000 s/f to Foot Locker in Washington Heights
May 20, 2019
Craig Deitelzweig, Henry Henderson,
Marx Realty Marx Realty
Manhattan, NY According to Marx Realty, a New York-based owner, developer and manager of office, retail and multifamily property across the U.S., Foot Locker has inked a deal to lease 25,000 s/f at 605 W 181st St. in Washington Heights. The sportswear and footwear retailer will relocate and expand its Upper Manhattan location into an experiential “Power Store” retail destination. The retailer plans to open its doors in the fall.
“We are thrilled to collaborate with one of the most recognizable athletic footwear and apparel retailers in the world,” said Craig Deitelzweig, president and CEO of Marx Realty. “Foot Locker’s new store will enjoy a larger footprint in one of Manhattan’s most vibrant up-and-coming neighborhoods and will be a slam-dunk for the company’s new concept, which has been successfully implemented around the world.”
The new “Power Store” concept has proven successful in cities such as London, Hong Kong and metro Detroit. Foot Locker’s experiential retail services for the new Upper Manhattan flagship location will include a barber shop, sneaker cleaning and gaming zones, as well as, activation spaces for events and an area where customers can “make their own shoes” and create limited-edition sneakers with customized designs. The retailer is moving to the larger space from its current location at 621 W. 181st St. as part of the company’s push to enhance the in-store experience. Foot Locker has launched plans to expand its experiential model into other cities in the U.S. including Los Angeles and Philadelphia.
The heavy foot traffic on 181st St., combined with the daily-needs retailers already in the neighborhood makes the location an attractive option for an immersive retail experience. Located steps from Broadway Ave., the property is situated between St. Nicholas Ave. and Wadsworth Ave.proximate to several dining, entertainment and retail options including Capital Bank, Blink Fitness, Game Stop, and T-Mobile. The location is also walking distance from the 181 St. A and 1 subway stations as well as multiple bus routes, connecting the store to the Bronx and lower Manhattan.
Marketing and leasing for the property was managed in-house by a Marx Realty team led by Henry Henderson, vice president of leasing. Evan Shuckman from RIPCO represented Foot Locker.
Marx introduces hospitality vibe at 10 Grand Central
by REW May 8, 2019
Marx Realty just unveiled the redesigned lobby at the newly rebranded 10 Grand Central office tower.
The company previously announced the completion of a redesigned lounge, terrace, and conference space at the building as part of the $45 million repositioning of the 35-story Ely Jacques-Kahn designed building located at 155 East 44th St.
The repositioning represents a design disruption in the office sector with a hospitality-like appeal that includes details such as a signature scent, customizable mood music and video art installations throughout the building.
The lobby and entry have been relocated to the building’s original 44th Street location, orienting the property towards Grand Central Terminal, as the original design intended.
“The redesigned lobby fulfills our vision to transform the space at 10 Grand Central to an office experience unlike anything currently available in the New York City office market,” said Craid Deitelzweig, CEO of Marx Realty.
“We have translated this repositioning strategy into a wildly successful hotel-meets-office package that sets a new standard and creates a space that embraces hospitality in a meaningful way. It’s a truly special atmosphere with a highly stylized look and feel that begins right at the front doors and transitions throughout the building while paying tribute to the building’s original design aesthetic.”
The company recently delivered 7,500 s/f of seventh-floor amenity space, including a lounge connected to a terrace, and a conference facility.
According to Deitelzweig, the redesign has resulted in over 130,000 s/f of new leases.
A JLL team led by Howard Hersch, Sam Seiler, and Cynthia Wasserberger is handling the leasing effort. Asking rents range from $72-97 psf.
Developers Are Trying To Make Sense Of New York City’s Climate Policies
April 28, 2019 | Miriam Hall, Bisnow New York
The New York City commercial real estate industry is picking over the details of upcoming city laws that will fine building owners if they exceed new emissions caps.
While the industry grapples with the implications of those requirements, Mayor Bill de Blasio has signaled he is not done with legislating building materials over environmental impact, sparking a wave of questions for which the industry wants answers.
This month, the City Council passed the Climate Mobilization Act, which requires large and medium-sized buildings to cut emissions 40% by 2030 and 80% by 2050. The worst-performing buildings have five years to bring their emissions down.
The new laws set emission caps, and would impose hefty fines if landlords don’t comply. Last week, Mayor Bill de Blasio — who wants the city to become carbon neutral by 2050 — took on the glass and steel buildings that have defined the city’s skyline, implying those types of buildings would no longer be allowed.
“We are going to introduce legislation to ban the glass and steel skyscrapers that have contributed so much to global warming,” de Blasio said last week. “They have no place in our city or on our Earth anymore.”
Though the city and the mayor have since conceded that glass and steel would not be entirely outlawed, de Blasio has continued to refer to it as a ban. His office has not released a draft or further explanation of his plan, but the mayor hopes new energy codes will be in place by next year, the New York Times reports.
“It’s a ban, and I’ll tell you why,” he told WNYC in his weekly segment Friday, but then acknowledged there is nothing stopping builders using the materials. “It is true that if a building owner wants to invest a lot more to make sure that that glass is not inefficient — it’s a major investment to do that — they can still have, certainly, a notable amount of glass.”
Members of the real estate industry — many of whom are already bristling against the laws demanding emission caps on building — said they were perplexed by the comments.
“It was absolutely ridiculous, and really the only thing that would work under his statement would be mud huts,” Marx Realty CEO Craig Deitelzweig told Bisnow. “I don’t know how you can attract world-class tenants to New York City if you can’t have glass buildings. It’s very strange. It’s backwards thinking.”
Youngwoo Executive Vice President Bryan Woo, whose firm is co-developing Pier 57, said the lack of clarity is disconcerting.
“If you are not exact and precise about the way that this is going to work … there is a huge chance for a misstep,” he said of de Blasio’s comments. “There’s nothing wrong with doing something for the environment, but we would love to know the details.”
The Real Estate Board of New York, which has criticized the emissions cap laws and believes they will cost the real estate industry at least $4B in building upgrades, is similarly in the dark about further legislation.
“We haven’t seen any law drafted or any policy drafted,” Carl Hum, REBNY’s senior vice president and general counsel, told the Times this week. “We are curious, if the mayor is banning glass and steel, what the alternative will be?”
Mention of the words “glass” and “ban” from the mayor resulted in panicked calls from clients at engineering consulting firm Thornton Tomasetti, Sustainability Project Director Casey Cullen-Woods said. Her view is that the mayor is posturing — though she is pleased to see this level of attention given to climate policy discussion.
“While it is very theatrical to say, ‘We will not allow glass and steel buildings,’ that’s not what the law actually said,” she told Bisnow, adding that building with glass will still be allowed. “It just has to be a high performance [material].”
Over the past 15 years, Cullen-Woods said, there has been a wave of new laws and codes to drive efficiency that have simply not worked fast enough.
“Sometimes it takes a controversy for people to step away and look at solutions. Arguably changing infrastructure is one of the hardest things for us to do,” View Dynamic Glass CEO Rao Mulpuri said.
His company makes smart window technology that allows the owner of a building to adjust how much light and glare a window lets in, which has been used in places like Durst Organization’s One Bryant Park and LaGuardia Airport.
“Glass is not our enemy,” he said. “You can build as much glass as you want as long as you build it smartly.”
Putting aside the is-it-a-ban-or-not conversation, there is no denying the industry is now facing a fundamental shift in the way it must build and manage properties.
“Developers will have to meet our new standards,” Mark Chambers, the director of the Mayor’s Office of Sustainability, told the Times. “Business as usual won’t cut it.”
Under the laws, varying emission caps apply to building 25K SF or larger. Rent-regulated and affordable housing, as well as houses of worship, are not subject to the new limits. The city is setting up an Office of Building Energy Performance to monitor building owners, who will be fined $268 for every ton of emissions beyond a building’s limit, the AP reports.
The laws have rattled the commercial real estate industry, with many big landlords claiming it is a punitive plan that will do more harm than good.
“In this legislation it is all stick and no carrot,” Rudin Management Chief Operating Officer John Gilbert said.
Since introducing a machine-learning system that integrates all building operation called Nantum, Rudin has already cut carbon by 44%, reduced steam consumption by 48% and lowered electricity use by 41%, Gilbert said.
His concern, shared with many others, is that all buildings are treated the same under the law, which will penalize companies that have densely populated buildings.
“You want to incent owners to cut their carbon, rather than create unreasonable caps that no one’s going to be able to meet,” he said, adding that he has no clue about what the mayor meant about banning glass and steel.
The Durst Organization, one of the city’s most prominent real estate partners, believes the legislation will wind up punishing densely populated, efficient buildings, and the fact that so many buildings have been exempt undercuts the goal.
“It ends up promoting inefficiency over efficiency,” Durst spokesperson Jordan Barowitz said. ”It’s misguided in that it exempts too many buildings in the city from the more stringent requirements in the bill.”
Marx’s Deitelzweig said the demands of retrofitting older buildings to meet the emissions caps means most people will likely opt to tear down buildings rather than improve them.
“I’m not sure that is good for the environment and wouldn’t meet their goals,” he said. “Many things that are good [for the environment], they are not really wonderful for the tenant experience. You have to find a balance.”
Marx Realty Unveils Reimagined Lobby as Firm Completes Hospitality-Infused Repositioning at 10 Grand Central
April 9, 2019
1930s Building Becomes Benchmark for Office Redesign with Hotel-Inspired Aesthetic Throughout Lobby, Amenities and Pre-built Suites
The projected artwork in the walnut wood-clad elevator lobbies at 10 Grand Central resemble the vines that climb the walls of the new Ivy Terrace on the building’s seventh floor.
Marx Realty, a New York-based owner, developer and manager of office, retail and multifamily property across the United States, unveiled the redesigned lobby at the newly rebranded 10 Grand Central office tower. The company previously announced the completion of a redesigned lounge, terrace, and conference space at the building as part of the $45 million repositioning of the 35-story Ely Jacques-Kahn designed building located at 155 E. 44th St.
The repositioning represents a distinct design disruption in the office sector with a hospitality-like appeal that includes details such as a signature scent, customizable mood music and video art installations throughout the building. The lobby and entry have been relocated to the building’s original 44th Street location, orienting the property towards Grand Central Terminal, as the original design intended. Classic, yet contemporary, concrete details combined with distinctive lighting, brushed brass accents, walnut wood walls create a sense of timeless sophistication. The design sensibility of the lobby is reminiscent of the world’s finest hotels and private clubs.
Tenants and guests at 10 Grand Central are greeted by a brushed brass reception desk that exudes a warm, hospitality-like vibe and acts as a focal point in the new lobby.
“The redesigned lobby fulfills our vision to transform the space at 10 Grand Central to an office experience unlike anything currently available in the New York City office market,” said Deitelzweig. “We have translated this repositioning strategy into a wildly successful hotel-meets-office package that sets a new standard and creates a space that embraces hospitality in a meaningful way. It’s a truly special atmosphere with a highly stylized look and feel that begins right at the front doors and transitions throughout the building while paying tribute to the building’s original design aesthetic.”
A striking beveled brushed brass reception desk stands as a dramatic focal point in the lobby and was crafted by renowned Brooklyn-based designer Yitzhak Weissman. Two video art installations depict vines in a nod to the ivy that climbs the walls of the terrace seven stories above and were conceived by Clare Brew, who’s work can be seen in New York at the Metropolitan Museum of Art. In addition to the remarkable lobby redesign, the entry-way features gloss black brickwork and oversized walnut doors attended by uniformed doormen.
The relocated building entry at 10 Grand Central has a contemporary hotel aesthetic with oversized walnut wood doors attended by a uniformed doorman.
“The unprecedented changes at 10 Grand Central are disrupting office design expectations for the real estate industry in terms of how these spaces should look,” added Deitelzweig. “Not surprisingly, the impactful and inviting redesign has resulted in over 130,000 square feet of new leases including some high-profile names in new media, finance and technology.”
Marx Realty recently delivered 7,500 square feet of seventh-floor amenity space, including a well-appointed lounge connected to an expansive terrace, and a conference facility anchored by a 36-seat Italian-designed table. The Lounge boasts a fully-equipped café with built-in appliances and ample seating including velvet banquettes with cushions fashioned in ‘Grand Central Green’, in a nod to the building’s proximity to Grand Central Terminal.
The Lounge seamlessly transitions to the Ivy Terrace via a wall of glass doors. The terrace includes spectacular city views, an inviting fire pit, and ivy-covered walls, reminiscent of a 1930s-era garden party. A conference space with a 36-seat table rounds out the amenity offering on the seventh floor.
A JLL team led by Howard Hersch, Sam Seiler, and Cynthia Wasserberger is handling the leasing effort. Asking rents in the building range from $72-97 per square foot.
About Marx Realty
Marx Realty is a division of Merchants National Properties (MNP). Founded in 1915, its current portfolio of properties includes over 4.3 million square feet of commercial office, retail and residential space as well as five mixed-use projects currently under development. Together, MNP and Marx Realty are vertically integrated and involved in all phases of real estate management, development, and leasing. The company’s assets comprise 67 properties in 17 states across the continental United States.
Foot Locker Plans Experiential Sneaker Store in Washington Heights
COMMERCIAL OBSERVER
BY REBECCA BAIRD-REMBA | APRIL 19, 2019 | 1:49 PM
Foot Locker is moving and expanding its Washington Heights store.
The shoe seller is relocating a few doors down from 7,000 square feet at 621 West 181st Street to a 25,000-square-foot space at 605 West 181st Street, according to landlord Marx Realty. Foot Locker signed a 10-year lease for its new outpost between St. Nicholas and Wadsworth Avenues, where it hopes to build an experiential “power store” concept that has succeeded in London, Hong Kong and Detroit. The new store will offer a barber shop, sneaker cleaning, games, event areas and a space where customers can make their own shoes. Asking rent in the deal was $180 a square foot.
Evan Schuckman from Ripco handled the transaction for Foot Locker, and building owner Marx Realty was represented in-house by Henry Henderson. Schuckman didn’t immediately return a request for comment.
“We are thrilled to collaborate with one of the most recognizable athletic footwear and apparel retailers in the world,” Craig Deitelzweig, the president and CEO of Marx Realty, said in prepared remarks. “Foot Locker’s new store will enjoy a larger footprint in one of Manhattan’s most vibrant up-and-coming neighborhoods and will be a slam-dunk for the company’s new concept, which has been successfully implemented around the world.”
Office Amenities Today Are All About The Talent War
April 18, 2019 | Jarred Schenke, Bisnow Atlanta
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Maybe it takes more than 150 years of combined commercial real estate experience to realize the desire for rooftop decks in office buildings is not going away any time soon. Neither are hotel-like lobbies with free WiFi, restaurants and bars, nor state-of-the-art gyms.
“There was a time we would build buildings and hang amenities in buildings kind of haphazardly,” Hines Senior Director John Heagy said. Not anymore.
Developers are investing big dollars into amenities and spaces that were once only dreamed of in Atlanta’s skyline. These spaces, like floor-spanning gyms or gathering areas with couches and community workstations that anyone in the building can use, also don’t necessarily contribute directly to the rent rolls.
But without them, landlords have a hard time landing tenants, according to veteran commercial real estate professionals at Bisnow’s Atlanta Office of the Future event Tuesday, many of whom have been in the business in excess of 20 years and have seen the evolution of what companies want in an office.
Heagy said landlords are simply responding to the pressure that tenants feel when it comes to recruiting and retaining a talented workforce, especially when those employees have every chance to jump ship to another company for better perks and work environments.
“If you think we’re not in a major hunt for talent, you’re kidding yourself,” Heagy said.
There is data to support these new office trends:
According to a 2017 workplace study by the retailer Staples, nearly a quarter of all workers surveyed would agree to a pay cut for a nicer work environment.
More than 80% of job applicants would outright reject a job offer if they didn’t like the workplace, according to OfficeBroker.com.
And 97% of employees consider the office environment as directly related to how their company values them, according to a British Council for Offices study.
New City President Jim Irwin said office developers in the past forced designs on the tenants, expecting them to fit into an office shell. What the employees may have found appealing was perhaps an afterthought.
“What we’re finding is that employees … are saying, ‘No. I have a choice and I am choosing something other than that contrived experience,’” Irwin said.
For some developers, the rooftop amenities need to appeal both to tenants and the larger public.
SJ Collins Enterprises is underway with The Interlock, a mixed-use project off Howell Mill Road in the Westside. One of the project’s buildings is slated to include more than 200K SF of loft office and 90K SF of retail space as well as a rooftop amenity that took some consideration, Senior Vice President Justin Latone said.
The plan now is to split the 38K SF space into a bar and restaurant for the public and a private, members-only club that will include a swimming pool with Midtown views, Latone said.
Fitness centers are growing pieces, literally, of an office amenity package. Once Riverwood 200 was built and filled with tenants, there was one space left on the ground floor that remained empty.
Its developer, Highwoods Properties, was approached by tenants about using the 5K SF space as a fitness center much bigger than the one Highwoods initially established in the tower. In turn, the tenants agreed to share in the space’s rent to create the even-larger center, Highwoods Properties Vice President Jim Bacchetta said.
“It tells you that employers will go the extra mile and pay extra to keep the talent,” Bacchetta said.
Bridge Commercial Real Estate CEO Jeff Shaw said developers and landlords are learning the lessons taught from the success and desire of companies that are actually willing to pay a premium to have both the flexibility and the cool factor of being housed in a coworking operation like WeWork or Industrious.
That prompted Shaw’s firm to hire an in-house interior designer whose background was designing hotels and their amenity-rich lobbies in their efforts to modernize older suburban office properties.
Office amenities and the building designs have all one things in common: helping companies attract workers to their buildings, Marx Realty CEO Craig Deitelzweig said.
“I think the real amenity is feeling good in your space, feeling like you’re at home,” he said.
Foot Locker Moves to Larger Experiential Space in Washington Heights
GlobeSt.com
By Betsy Kim | April 17, 2019 at 03:27 PM
The store’s 25,000-square-foot lease is a “slam-dunk” with its new concept in retail, says Craig Deitelzweig, CEO of Marx Realty which owns and manages the property.
NEW YORK CITY—Foot Locker is expanding its size in Washington Heights, Manhattan as well the idea of shopping for shoes. The company is opening a new concept “Power Store” at 605 W. 181st St. It signed a 10-year deal with Marx Realty to lease the 25,000-square-foot building as the sole tenant. The asking rent was $180 per square foot.
Foot Locker is stepping up its game, moving from its approximately 7,000-square-foot space at 621 W. 181st St. just up the street. The new “Power Store” more than triples the store’s size. It will offer a barber shop, sneaker cleaning, gaming zones, event space and an area where customers can “make their own shoes” and create limited edition sneakers with customized designs. The store will open in the fall of 2019.
Craig Deitelzweig, president and CEO of Marx Realty, is known for repositioning and adding value to assets. With one of the most recognizable athletic footwear and apparel retailers as a new tenant, the space is a prime example of real estate leveraging experiential retail. It’s one of the evolving brick-and-mortar stores, drawing customers through the doors with services they can’t get online.
“Foot Locker’s new store will enjoy a larger footprint in one of Manhattan’s most vibrant up-and-coming neighborhoods and will be a slam-dunk for the company’s new concept, which has been successfully implemented around the world,” says Deitelzweig.
The company has opened other “Power Stores” in London, Hong Kong and Detroit. It plans to continue to branch out with similar stores in other US cities including Los Angeles and Philadelphia.
Marx Realty points to the foot traffic on 181st Street, and how nearby businesses carrying everyday products help foster the right environment for an immersive retail experience. Retail businesses in the area include Capital Bank, Blink Fitness, Game Stop, and T-Mobile, and multiple dining and entertainment spots. The location also enjoys convenient access to public transportation connecting with both the Bronx and lower Manhattan.
In this transaction, a Marx Realty team led by Henry Henderson managed the marketing and leasing of the property for the owner landlord. Evan Shuckman from RIPCO represented Foot Locker.
Foot Locker’s new ‘Power Store’ bringing more than sneakers to Washington Heights
By Lois Weiss | April 16, 2019 | 9:57pm
Foot Locker is marching its new “Power Store” to Washington Heights.
When it opens this fall, the 25,000-square-foot space at 605 W. 181st St. will sell sneakers for sure — but also feature a barbershop, a gaming zone, an event space with a DJ, and artist areas where customers can design their own footwear and get their sneakers cleaned.
London, Hong Kong and Detroit already have slam-dunk versions of the Power Store with Philadelphia and LA locations soon to open.
The space was previously occupied by America’s Kids. Foot Locker’s current spot at 621 W. 181st, which is roughly half the size, will shutter itself. The stores are both between St. Nicholas and Wadsworth avenues along the popular shopping street served by the No. 1 subway and bus routes.
Foot Locker was represented by Evan Schuckman of Ripco.
The building owner, Marx Realty, was repped by an in-house team led by Henry Henderson.
“In this retail day, there will be winners and losers,” said Craig Deitelzweig, CEO of Marx Realty, which owns property in 16 states. “We chose Foot Locker because they are local and we believe that Foot Locker understands what it takes to be successful in this retail environment. They are very future-proof.”
NEW YORK CITY—“It’s the first office building that marries hospitality with office,” explains Craig Deitelzweig, Marx Realty’s president and CEO. He spearheaded the $45 million renovations recently completed at 10 Grand Central, the 35-story skyscraper at 155 E. 44th St.
“So many buildings are white, marble clad. Close your eyes and open them and you could be in Dubai or Ohio. There is often no reference to the city. We are the opposite of that. Each of our assets will really speak to the character of the building.” Part of the repositioning returned the front door to E. 44th St., where it originally was located for access to Grand Central Terminal. Over the years it was moved and the office tower had the address of 708 Third Ave.
Ten Grand Central has green details in reference to the green color of the historic transportation hub referenced in its name, which is conveniently down the street. “We have been finding tenants have been really embracing the building’s character,” says Deitelzweig.
And the numbers are backing up Marx Realty’s capital improvement campaign. Prior to the repositioning rents at the building were averaging $48 per square foot in the base, with asking rents at $75 per square foot in the mid-rise level and $78 per square foot in the high-rise tower suite. Now, the asking rents range from $72 to $97 per square foot. Plus, the building is 89% leased.
Merchants’ National Properties bought the property in April 2007 for $121.5 million. Marx Realty is the company’s management, leasing and development subsidiary, which has 71 assets in 16 states. In August 2017, Deitelzweig was hired and tasked with repositioning the properties to maximize their value.
He started his career at Skadden Arps. But the real estate attorney then worked at Rockrose Development and Ruben Companies in repositioning and developing properties often focusing on offices. Plus, he oversaw work on 70 hotels during his career including the W Hotel in South Beach, FL.
Deitelzweig combined his experiences with office and hotel properties with his passion for architecture, history and design. He worked closely with David Burns, principal of Studios Architecture. In a year’s time, the Midtown East building was transformed into 10 Grand Central.
The 35-story, 359,326-square-foot office tower was built in 1931 and originally design by Ely Jacques Kahn. The redesign avoids resembling a retro movie setting or Disneyworld. Instead it serves as a modern interpretation of what the architect was building or what he would have liked the building to be today, according to Deitelzweig. “The entire building was created to be evocative of a 1930s hotel space,” he adds noting this will stand the test of time.
Tenancy is not sheerly based on a credit sheet. Deitelzweig wants tenants to find a professional home where they can mix and mingle in the lounge and terrace. As another building amenity, there’s a 1930s style bar cart, with an honor bar available from 5:00 pm to 10:00 pm.
Current tenants include Benenson Capital, White Oak, Equity Partners, Marks O’Neill, TRNC, PMC Treasure, World Federalist Movement, CGB, Global Source Partners and The Week. An industry source tells GlobeSt.com “The Rock” Dwayne Johnson’s movie production company is also in the building.
