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Manhattan Pop-Up Shops Might Be Here to Stay

These days, with the softening real estate industry in Manhattan, stable long-term retail tenants are a scarcity. To compensate, the real estate industry is adapting to short-term tenancies, named licensing deals. Licensing deals allow tenants to use a space rather than own it for a specified time period. The method is being used to rent to pop-up shops in the city. A pop-up tenancy can last from a day up to a year. Both landlord and tenant can benefit because it avoids lengthy legal processes, and bypasses the usual 80- to 100-page lease for a curt version.

It appeals to tenants because it allows them to test the market before tying themselves down and committing for the long run. The owner makes money on the property while it remains on the market for a long-term lease. The tenant gets visibility in the prestigious New York market with very limited risk. The landlord benefits in averting an empty store front, and as a bonus many pop-ups come with celebrity back-up, such as Gwyneth Paltrow and Kanye West, which help endorse the properties.

As per The Real Deal, pop-ups were traditionally seen as short term improvising that landlords and brokers used while waiting for permanent tenants. But some experts say these transactions will become increasingly sought after, as building owners struggle to minimize vacancies in the ongoing battle between brick-and-mortar stores and e-commerce. Currently, less than 15 percent of all retail sales in the U.S. are made online. By 2025, however, it is estimated that one out of every four purchases will be made online, as per a November 2016 report from FTI Consulting. These odds create a daunting reality in which retail stores are increasingly guarded when it comes to signing long term leases.

“Things change so drastically these days, it’s harder for retailers to consider a long-term deal,” says Kelly Gedinsky, Winick Realty Group broker. “Unlike five years ago, landlords are more open to pop-ups because so many [potential tenants] are coming to them and their brokers saying, ‘Look, we want to test this market for a year. If it works, we’d be happy to look into a longer-term deal.’”

Manhattan Borough President Gale Brewer’s office counted 200 vacant store fronts along Broadway this June. She places the blame on high rents, and e-commerce augmented by Manhattan’s pricey commercial rent tax. Between 2010 and 2014, average asking rents in 16 Manhattan strips, as tracked by CBRE, jumped 89.1 percent. It is “an unsustainable situation for some tenants as rents surpassed what their sales growth could support,” says the brokerage firm. Manhattan vacancies have been on the rise since, from a low of 2.5 percent in 2012, to 3.7 percent in 2016, and now 4.2 percent in the first quarter of 2017, according to Okada & Company.

A San Francisco-based website entitled Storefront, lists vacant storefronts allowing potential pop-ups to browse through available spots on a map, by price and square footage, similar to Airbnb or StreetEasy. The site charges a 20 percent fee, and a company rep walks a renter through the process. “We don’t see ourselves as a competitor to the traditional retail market … We just see that space is space,” said Joy Fan, Storefront’s national director. “Vacancies are unfortunate, but the shift needs to happen, so we’re really architecting the next layer of retail for the future.”

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The Jewish Voice-082317-Manhattan Pop-Up Shops Might Be Here to Stay

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

The UES is facing a retail vacancy epidemic

In the heart of retail’s “Gold Coast” on the Upper East Side, the space that once housed trendy dress shop BCBGMAXAZRIA collects dust. The retailer called the five-story townhouse home at 770 Madison Avenue for over a decade, but shut the doors in February amid a larger corporate bankruptcy. The landlord has yet to find a replacement.

Over on Lexington Avenue, there are four retail vacancies near the corner of East 85th Street. And on the 13-block stretch of 3rd Avenue between East 70th and 83rd streets, there are only two blocks that aren’t marred by at least one empty storefront.

Manhattan’s streets are awash with empty storefronts after retail asking rents climbed to untenable levels and tenants started to push back. But the sheer number of vacancies on the Upper East Side is alarming: The Real Deal counted 82 empty storefronts along Madison, Lexington, Third and Second avenues between 57th and 96th streets during an afternoon in late July.

“That is a lot, and there’s probably 20 percent more that’s on the market,” in terms of space that’s currently occupied and available for lease, said Greg Tannor, a retail specialist who left Cushman & Wakefield in April to join Lee & Associates as a principal.

Third Avenue between East 57th and 79th streets saw the biggest increase in its availability rate during the second quarter among the 11 retail corridors tracked by Cushman. The availability rate rose 7 percent year-over year to 16.6 percent, according to Cushman’s most recent retail report.

And Madison Avenue between East 57th and 72nd streets saw the second-highest increase: a 5.3 percent jump to an availability rate of 23.5 percent, which is the third highest among the corridors the brokerage tracks.

The forces at play are different among Upper East Side’s different retail corridors. Madison Avenue, for example, is one of the city’s premiere luxury shopping strips with asking rents to prove it (an average of $1,431 per square foot).

Over on Third Avenue, asking rents average $283 per square foot, and experts in the area said the avenue’s shops are geared more toward chain apparel stores and national brands due to the kinds of large retail spaces that line the avenue. The struggles faced by national retailers, therefore, are having more of an impact on storefronts on Third Avenue than they would on a tony strip like Madison, brokers said.

“Third [Avenue], I think, is the first market to really struggle with some of the difficulties we’re seeing with national soft goods retailers,” Cushman’s Steven Soutendijk said. “They’re the ones that are struggling in malls across the country.”

In recent months, for example, stores went empty at 1030 Third Avenue when American Apparel closed up one of its last shops following a bankruptcy auction earlier this year. And Reebok left behind and empty storefront at 1132 Third Avenue after shutting down its FitHub location.

By comparison, Second Avenue is considered more neighborhood-focused, geared toward service retail like dry cleaners and restaurants located in smaller stores where top-line rents are more manageable.

Beyond the general woes facing retail, the avenue was long impacted by construction along the Second Avenue subway line, which finally opened earlier this year.

“Certainly, now that the construction has completed, those vacancies should naturally have to fill in,” Winick Realty Group’s Kelly Gedinsky said. “They’re not obstructed by bridges over the sidewalk space anymore.”

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THE REAL DEAL_080417_The UES is facing a retail vacancy epidemic

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

Are pop-up shops becoming a permanent fixture?

Pop-up shops are getting access to some of the best storefronts in New York City under so-called licensing deals, with a lot less hassle than a regular retailer faces.

Stable long-term retail tenants are hard to come by in Manhattan as the market continues to soften, and the real estate industry is adapting to short-term tenancies as much as long-term ones. Additionally, many pop-ups come with celebrity backing, from Gwyneth Paltrow to Kanye West, which can help landlords promote their properties.

A pop-up tenancy, which by most industry definitions lasts from one day to one year, can be extremely attractive to both parties — a landlord monetizes the space and remains open for a long-term lease, and the tenant gets visibility in the high-profile New York market with relatively little long-term risk.

As The Real Deal reported in December, pop-ups are typically seen as a stopgap measure that landlords and brokers can use while they wait to secure more permanent tenants. But some industry players say they will become increasingly commonplace as building owners look for new ways to minimize losses and retain tenancies in the ongoing shift from brick-and-mortar retail to e-commerce.

Online sales currently make up less than 15 percent of all retail sales in the U.S., but by 2025 roughly one in every four purchases will be made online, according to a November 2016 report from the global advisory firm FTI Consulting. Retailers themselves have become increasingly wary about signing long-term deals in such a rapidly accelerating environment, Winick Realty Group broker Kelly Gedinsky said.

“Things change so drastically these days, it’s harder for retailers to consider a long-term deal,” she noted. “Unlike five years ago, landlords are more open to pop-ups because so many [potential tenants] are coming to them and their brokers saying, ‘Look, we want to test this market for a year. If it works, we’d be happy to look into a longer-term deal.’”

For more, download the full article in PDF

THE REAL DEAL_080217_Are pop-up shops becoming a permanent fixture

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

New York Observer

Keep It Small: The Leases Where Mini Is Marvelous

While bigger is often considered better, when it comes to leases for some small businesses, the opposite can be the case.

Jewelry designer Angie Marei was looking to move her jewelry business out of her home office in Dumbo, Brooklyn, but wanted to remain nearby. She needed a space where she “could take client appointments, showcase my work in a showroom setting and also have space for my jewelry bench,” she said.

In searching around Brooklyn and Manhattan, she kept finding spaces that were just too large for her needs. But at Two Trees Management Company’s 45 Main Street in Dumbo, she found a cozy 187 square feet. She moved in on March 15 and opened Diaboli Kill Jewelry Showroom for business on June 1.

“I searched all around the Brooklyn and Manhattan, and most offices were too big for my needs. I was looking for a nice private office where I could take client appointments, showcase my work in a showroom setting and also have space for my jewelry bench. Since jewelry doesn’t take up much physical space, this 187-square-foot office was perfect for me.”

Speaking of 45 Main Street, designer Nicole Meléndez occupies 269 feet in the building and said that for her athleisure and swimwear studio, the square footage is just right.

“I’m in business to turn a profit, and it is not practical to get a big space for two to three people to be in, and [it] will be an expense that will have me chasing my tail,” Meléndez said.

The building has some shared spaces—a conference room on the floor and a fully furnished rooftop—which she and her employees can use.

“I’d rather get a well-designed space in a bright and comfortable environment that allows me to have a space to work but that I don’t have to work only to pay [for] the space,” she said.

For Rawmantic Chocolate owner Kasia Bosne, “the bulk of her business comes from selling her chocolate to other retail locations so she needed to have a presence but didn’t need a large space as long as there was a kitchen included for preparing chocolates on site,” Winick Realty Group’s Zach Diamond, the tenant’s representative, said via a company spokeswoman.

So when Rawmantic’s old landlord informed the organic chocolate company that it would be redeveloping the building where it was located, it found a 320-square-foot retail space at 1053 First Avenue between East 57th and East 58th Streets, where it will be opening in September, Diamond said.

And at 21 Crosby Street, Eastern Consolidated’s James Famularo did a series of small deals for boutique retailers Dinosaur Designs, Max-Bone, Fueguia and Annabel Ingall. He represented the landlord, Corigin Real Estate Group, and procured the tenants. The reason the tenants wanted spaces, all 400 square feet or smaller, came down to dollars and cents. “Bigger spaces were too expensive,” he said, referring to Crosby Street’s high rents. And the landlord knew as much, cutting larger spaces down to smaller ones to make them rentable to luxury goods shops.

For more, download the full article in PDF

NY Observer-072617-Keep It Small

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

mann newswire logo

Winick Realty Group Expands Commercial RE Efforts with Addition of Investment Sales & Commercial Leasing Division

david-workman-print-ver-profile-001Winick Realty Group, founded in 1982 as the second-ever commercial leasing firm solely focused on retail, has announced an expansion of its commercial real estate efforts for the first time in its 35-year history.

The firm has hired David Workman, formerly Executive Managing Director of Savitt Partners, to lead a team of brokers who will handle investment sales, office leasing, 1031 exchanges, land sales and a host of other commercial real estate services on a local, national and international basis. The new investment sales and commercial division will leverage Winick’s existing retail relationships, as well as harness the incredible analytics and data efforts led by Executive Vice President Kenneth Hochhauser, in order to bring new, expanded levels of service to the Winick Realty Group brand.

“Our vision is to expand upon and establish even more resources, such as investment, acquisitions, dispositions and commercial leasing, within the array of services this iconic firm already provides,” said Workman. “For more than three decades, they have specialized in retail leasing and now, with this new department, landlords and tenants alike can also take advantage of an expertise in all aspects of commercial real estate in both the leasing and sales arenas. We are excited to add additional services for the company to offer their clients.”

Workman comes to Winick Realty Group with more than 30 years of experience, during which time he has been involved in investment sales and leasing transactions valued over $1 billion. His career has run the gamut from commercial leasing to investment sales to the sale of land and air rights.

Over the course of his career, Workman executed multiple 1031 exchanges in New Jersey, Florida and New York, among others. Workman acted as buyer broker for a foreign investment group in the acquisition of two off-market downtown office buildings at 67 Broad Street (now 75 Broad Street) and 39 Broadway, totaling approximately 1.2 million square feet. He sold seven supermarkets and five CVS locations totaling approximately 400,000 square feet in Georgia, South Carolina and North Carolina to The Rosen Organization, as well as 1,000 acres of land at the Tennanah Lake Golf & Tennis Club in Roscoe, NY to one of the largest landlords in Palm Beach. Workman represented Pace University in the off-market acquisition of 100,000 square feet at 106 Fulton Street; sold more than 100,000 square feet of air rights at 310 West 52nd Street to Sant Chatwal, the developer of the Dream Hotel; and oversaw the marketing and eventual sale of 80-90 Livingston Street, a multi-use building comprised of existing retail and residential units with development rights in Brooklyn.

On the commercial leasing side, Workman has successfully completed commercial leasing efforts on behalf of Wilhelmina Models, Fiduciary Trust, First Investors, Metromedia, Masco Corporation, Met Life, Zurich Reinsurance and many others. Coincidentally, the only retail deal Workman has ever completed was with Winick Realty Group, having worked with Executive Vice President Darrell Rubens a decade ago to lease more than 23,000 square feet to Gold’s Gym at 90 John Street.

Workman leads a team that includes new hires Elana Tsyganko and Max Kostikov, both of whom come to Winick with more than six years of commercial leasing and sales experience, as well as salesperson Matthew Schwartz. Derek Weinberger, who has been an Investment Sales Associate at Winick Realty Group since 2015, where he focuses on properties in New York City and Long Island, will now be working with Workman as well. The team brings together years of experience in real estate investment and deal structuring and they are poised to take on any job required to give their clients the insight and expertise they need.

“I am honored to join Winick Realty Group in this effort and I am heartened to know that I have their full support,” said Workman. “I like the fact that CEO Jeff Winick and President Steven Baker, along with all of the partners here at Winick Realty Group, believe in what we are doing and they are completely behind us. One of the most attractive things about this new venture is being able to have the support of a cutting-edge, market-savvy team. Given the immediate reaction of the entire Winick organization in bringing their potential business opportunities and relationships, we expect to be very busy.”

“It is a pleasure to welcome David Workman and our entire new commercial leasing and investment sales team as they lead Winick Realty Group into its next chapter,” said Steven E. Baker, President of Winick Realty Group. “We look forward to being able to offer our clients a full range of commercial leasing and investment sales services and I am confident we have the right team in place to make this new division a great success.”

For more, download the full article in PDF

mann newswire-072417-Winick Realty Group Expands Commercial RE Efforts with Addition of Investment Sales & Commercial Leasing Division

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

globe street logo

Winick Realty Expands Commercial Division With Workman Hire

max-kostikov-print-ver-profile-001David Workman, a former executive managing director with Savitt Partners, has joined Winick Realty Group as part of the firm’s first effort to expand its commercial real estate services operations in its 35-year history.

The retail commercial leasing firm reports it has hired Workman to lead a team of brokers charged with investment sales, office leasing, 1031 exchanges, land sales and a host of other commercial real estate services responsibilities on a local, national and international basis. The new investment sales and commercial division will leverage Winick’s existing retail relationships, as well as harness the firm’s analytics and data efforts led by EVP Kenneth Hochhauser.

“Our vision is to expand upon and establish even more resources, such as investment, acquisitions, dispositions and commercial leasing, within the array of services this iconic firm already provides,” says Workman. “For more than three decades, they have specialized in retail leasing and now, with this new department, landlords and tenants alike can also take advantage of an expertise in all aspects of commercial real estate in both the leasing and sales arenas.”

Workman has more than 30 years of commercial real estate investment sales and leasing experience. His career has run the gamut from commercial leasing to investment sales to the sale of land and air rights. Over the course of his career, Workman executed multiple 1031 exchanges in New Jersey, Florida and New York, among others.

Workman also acted as buyer broker for a foreign investment group in the acquisition of two off-market downtown office buildings at 67 Broad St. (now 75 Broad St.) and 39 Broadway, totaling approximately 1.2 million square feet. He sold seven supermarkets and five CVS locations totaling approximately 400,000 square feet in Georgia, South Carolina and North Carolina to The Rosen Organization, as well as 1,000 acres of land at the Tennanah Lake Golf & Tennis Club in Roscoe, NY to one of the largest landlords in Palm Beach.

Among some of his other high-profile deals include his representation of Pace University in the off-market acquisition of 100,000 square feet at 106 Fulton St. He also sold more than 100,000 square feet of air rights at 310 West 52nd St. to Sant Chatwal, the developer of the Dream Hotel, and also oversaw the marketing and eventual sale of 80-90 Livingston St., a multi-use retail and residential building with development rights in Brooklyn.

On the commercial leasing side, Workman has successfully completed commercial leasing efforts on behalf of: Wilhelmina Models, Fiduciary Trust, First Investors, Metromedia, Masco Corporation, Met Life, Zurich Reinsurance and many others.

Workman leads a Winick Realty Group team that includes new hires Elana Tsyganko and Max Kostikov, both of whom come to Winick with more than six years of commercial leasing and sales experience, as well as salesperson Matthew Schwartz.

Derek Weinberger, who has been an investment sales associate at Winick Realty Group since 2015 where he focuses on properties in New York City and Long Island, will be working with Workman as well.

For more, download the full article in PDF

globe street-071917-Winick Realty Expands Commercial Division With Workman Hire

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.