June 13, 2014
Discount fashion retailer Forever 21 has signed a lease for a 15,000-square-foot space for the upcoming Mall at Bay Plaza in the North Bronx, the shopping center’s developer, Prestige Properties, announced Thursday.
The Los Angeles-based chain will move in alongside stores like Victoria Secret, H&M and anchor department stores Macy’s and JC Penney in the 780,000-square-foot retail development slated to open Aug. 14.
Mall at Bay Plaza rendering. (Prestige Properties)
“We initiated the deal; we sought after Forever 21,” said Jerry Welkis of Welco Realty, who represented Prestige in the deal. Mr. Welkis added that around 80 percent of the new mall is leased at this point.
The development located at the intersection of I-95 and Hutchinson River Parkway near the Westchester border created 2,000 construction jobs and could mean as much as 1,700 permanent jobs once it’s open, according to the company.
“Forever 21 has made leaps and bounds in the fashion and retail world, and we are honored to have them join our family of stores at the mall,” said Prestige’s CEO Sam Shalem in a prepared statement. “Local residents have been quick to tell us that they will no longer have to travel outside of the borough to access great clothes and goods.”
Michael Townsend of Townsend & Associates represented Forever 21 in the transaction, according to Mr. Welkis. Mr. Townsend and Forever 21 didn’t immediately respond to phone and email requests.
Mr. Welkis declined to state asking rents or the term of the lease, but he previously told The New York Times that rents in the mall vary from $100 to more than $200 per square foot.
Last Updated: April 22, 2014
MIAMI—Retail leasing is a different animal in Miami than it is in Houston, Seattle or Chicago. But there are some common threads that run through the markets.
GlobeSt.com caught up with Jerry Welkis, president of Welco Realty and X Team International partner, to get his take on how retail leasing has changed and what trends he sees in emerging in part one of this exclusive interview. Welco has represented the likes of AMC Theaters, Marshalls, Toys ‘R Us, Party City, and Dress Barn. Be sure to come back this afternoon for part two, where Welkis will discuss his best retail leasing strategies.
GlobeSt.com: What is the state of retail leasing and how has it changed over the past 12 months?
Welkis: Over the last 12 months there has been a significant increase in the open to buy for both national and regional retail chains. There seems to be a real interest in doing new deals, however retailers have become more demanding in their requirements for stronger co-tenancy language, early termination rights, and more restrictive exclusives to protect their core business. Retailers are also asking for more tenant improvement allowances, which suggests that they are looking for the landlords to help fuel their expansion by using landlords’ dollars as opposed to their capital expense dollars, allowing them to open more stores.
There has also been a severe reduction in the last 12 months of second generation, large box space that has not already been leased. As a result of the bankruptcies we saw over the past few years, including Circuit City, Borders, and Linens N’ Things, there was a significant amount of medium and large size retail boxes that needed to be filled. That is no longer the case.
There also seems to be a tremendous amount of activity in the quick-casual serve business primarily with franchised restaurants. When corporate executives and middle management found themselves out of work during the down turn, many of them decided to go into business for themselves and purchase franchises. This has brought a tremendous upsurge in new franchise concepts and the need for new retail locations.
GlobeSt.com: Is it easier or more difficult to get retail leases done? How creative do you have to get these days?
Welkis: It has become increasingly difficult to get retail leases finalized. One of the major issues is finalizing a Letter of Intent.
When you finalize the business terms with a retailer, the letters of intent that have been drafted have become more like lease documents and it takes weeks, and in some cases months, just to finalize it. When you eventually get it finalized, it typically goes to a real estate committee, which meets once a month. If you miss one meeting, it will get put off until another 30 days.
Additionally, many of the leasing companies have scaled-down and the legal departments are inundated with new leases, lease extension agreements, estoppel certificates, etcetera. The legal department ends up reviewing documents on a priority basis so if you are not making a deal with a tenant that will open in the same year, your leases get put in the bottom of the pile.
GlobeSt.com: What trends are you seeing in retail leasing? For example, are certain product types hotter than others? Certain sizes trending generally? Tenants looking for particular features? Is it a tenant’s market or a landlord’s market?
Welkis: One of the very active retail segments is the health club fitness center industry. We are still seeing strong activity in the big box fitness clubs from 30,000 to over 100,000 square feet offering spa-type amenities along with typical fitness club services and offerings.
Companies such as Lifetime Fitness, LA Fitness, 24-Hour Fitness, and Equinox give a consumer a country club-type atmosphere with restaurants, spas, personal services, etcetera. There is also strong activity in the more budget-oriented health clubs such as Retro Fitness, Planet Fitness, Crunch Fitness, and Blink Fitness, typically offering a 15,000 to 20,000 square feet “no frills” environment, with a clean and well equipped fitness center.
Another strong trend, as I mentioned before, are the fast–casual restaurant concepts such as Noodles & Co., Sarku, Panda Express, Corner Bakery. and Smashburger, to name a few. Additionally, the self-service frozen yogurt franchise keeps multiplying because of the high profit margin and minimal operational and employee cost.
The supermarket retailers are being very aggressive as well. There are distinct offerings from the lower price point offerings such as Aldi, operating in approximately 17,000 square feet, to companies like Fairway Supermarket operating in approximately 55,000 square feet.
These tenants are able to get into the urban markets with smaller space requirements and multi-level layout abilities. Fairway is a great example of what consumers have come to expect from these supermarkets, including normal and organic food products along with a great display of prepared foods for on-premises and off-premises consumption, an in-house bakery, a cheese department and a fresh bean coffee display. Wegman’s Supermarket is operating in over 120,000 square feet and offering space for other boutique stores within its store, giving consumers a wide selection of all types of products.
The trend of downsizing has also continued by retailers who are looking to maximize sales per square foot. Some of these retailers have been affected by the continued increase in Internet sales. A couple of examples are Staples, who has been operating in 20,000 to 24,000 square feet and are now downsizing to 15,000 to 12,500 square feet, and Best Buy who has been operating in 40,000 to 50,000 square feet and are now looking at stores as small as 30,000 square feet.
Over the last few years, it was definitely a tenant’s market due to the lack of expansion growth by many retailers during the recession. However, there has been a large shift in the marketplace and there is now a shortage of good available retail space as a result of the lack of new shopping centers being developed in the last few years and infill of the previously available space. That said, it is now a landlord’s market.
April 3, 2014
Rendering of the entry to Mall at Bay Plaza
National one-stop-shop beauty products store Ulta Beauty signed a lease for 11,400 square feet at the under-construction Mall at Bay Plaza near Co-op City in the Bronx, and hopes to debut on Aug. 14,
the day of the mall’s grand opening.
Ulta’s asking rent was in the low-$100s per square foot and the mall’s rents climb as high as the $200 per square foot range (for smaller stores), the landlord’s representative, Jerry Welkis of Welco Realty, told Commercial Observer. Ulta’s lease is for 10 years and marks the retailer’s first location in the Bronx. The brand has more than 550 stores nationwide.
The over $300 million, 780,000-square-foot Mall at Bay Plaza is being developed by Prestige Properties & Development, which also developed the adjacent Bay Plaza Shopping Center.
“It’s the only borough without an enclosed fashion mall,” Mr. Welkis said.
Ulta will join Macy’s, Victoria’s Secret, Michael Kors, H&M and American Eagle. The 160,000-square-foot Macy’s and the existing free-standing 166,000-square-foot J.C. Penney will serve as the anchor tenants. The mall is being connected to J.C. Penney so the department store can be entered via any of its three floors.
Rendering of the inside of Mall at Bay Plaza
The new mall is at the intersection of I-95 and the Hutchinson River Parkway. It will feature more than 100 stores, restaurants and a large health club. There will also be an 1,800-vehicle parking garage associated with the mall. Altoon Partners (formerly Altoon + Porter) designed the complex.
The two malls won’t be competing against each other as the open-air Bay Plaza Shopping Center is more value-driven, said Mr. Welkis. The existing mall is “primarily a big-box outdoor power center,” he said.
Sabre Real Estate Group‘s Jayson Siano, Doug Bomzer and the late Beth Lamport represented Ulta in the deal.
(1) 255 Greenwich Street, New York, NY
Welco Realty, Inc., based in New Rochelle, New York represented Fairway Supermarkets at 255 Greenwich (Murray Hill Section), the building that had been known as 75 Park Place until it was rebranded in an effort to attract a big-box retailer.
Fairway Market, which launched its first store on the Upper West Side in the 1930s, is coming to the World Trade Center neighborhood. The high-end grocery chain just signed a lease for a jumbo store of more than 52,000 square feet at 255 Greenwich St. at the corner of Murray Street, two blocks north of the WTC. The new Fairway will have more than 10,000 square feet on the ground floor and the rest in the concourse, with a main entrance on Greenwich and Murray streets. The new downtown store is set to open next year.
(2) DSW Plaza, Lake Grove, NY (Long Island)
DSW Plaza is located in Lake Grove, New York directly across the regional enclosed Smith Haven Mall. Other major tenants in the center are Babies & Toys R Us, DSW & Golfsmith. Additional tenants to be announced shortly.
For more information about Fairway Supermarkets, contact Mr. Jerry Welkis at firstname.lastname@example.org or Allen Cooperman at email@example.com.
Welco has also arranged lease signings for the following tenants:
- BJ’s in Kearny, New Jersey for an 87,000 s.f. store. The development will have additional retail space and will have easements between two other major centers. One anchored by Shoprite Supermarket and the other anchored by Kmart and Modell’s Sporting Goods. Planned opening for BJ’s is 2015.
- Med Express at the following locations:
- Watchung, NJ
- Springfield, NJ – 200 Route 22 (4,620 s.f.)
- Lodi, NJ – 184 Essex Street (5,074 s.f.)
- Totowa, NJ
- Title Boxing Club at the following locations:
- East Rutherford, NJ – Liberty Commons (4,620 s.f.)
- Nanuet, NY – The Mall at 59 (4,400 s.f.)
- TJMaxx – Abill Plaza, Totowa, NJ
- Once Upon a Child – Wick Shopping Plaza, Edison, NJ
- Vitamin Shoppe – Wayne, NJ (3,956 s.f.)
When The Mall at Bay Plaza opens in the summer of 2014 it will be the first en-
closed anchored fashion mall built in New York City in over 40 years. This first-class,
suburban-style fashion mall will showcase over 100 national fashion stores and restaurants.
Tenants such as H&M, Victoria’s Secret, Aeropostale, The Gap, Express and American Eagle will be joining anchors Macy’s and JCPenney. The Mall will encompass a total of over 780,000 s/f of retail space. This will include an outdoor village area, a complete food court and parking
for over 2,600 cars. This $300MM+ project promises to be the crown jewel of retail for the
The Mall at Bay Plaza is a unique combination of extraordinary visibility, accessibility and
immense population density. The site has access from both its feeder highways, I-95 and the
Hutchinson River Parkway, carrying a total of over 250,000 cars per day. Located in close proxim
ity to the Bronx/Westchester border, the total immediate trade area has an incredible population of approximately 1.4 million people. The mall is being built adjacent to the existing 1.3 mil-
lion s/f Bay Plaza Shopping Center, already the largest and one of the most successful shopping centers in New York. When the mall is built the GLA of the entire complex will be well over 2 million square feet.
When it came to choosing the design, the developer wanted to make a statement and create
nothing less then the definitive New York City retail project of this generation. The design is
meant to evoke a classical timeless feel, and balance that with state-of-the-art amenities not
seen in any malls in the area. With that in mind Los Angeles–based architect Altoon Partners was chosen. Already renowned for designing world-class malls in China and Russia, it succeeded in
bringing that vision to life.
All the components of a wildly successful project are in place, from a stellar location to significant retailer interest to complete community and political backing. The Mall at Bay Plaza is certain to be a welcome addition to the New York City retail landscape.
September 27 – October 10, 2013
FLEMINGTON, NJ – North Plainfield based Levin Management has announced the successful negotiation of a long-term lease with HomeGoods at The Shoppes at Flemington. Levin’s leasing representative Jake Frantzman negotiated the transaction, which included construction of a new 22,000 s.f. building for the home fashions retailer.
Jerry Welkis of Welco Realty served as the broker for HomeGoods in the transaction. A grand opening was held in September.
In addition to providing full-service management and marketing for the center, Levin also served as construction manager for development of the new retail space. Additionally, Levin directed the process to secure the land development appraisals for the project. Steven Barthel, Levin’s vice-president of construction, oversaw all approvals and construction.
The Shoppes at Flemington is owned by New York based Garrison Investment Group.
MAY 6, 2013 | BY KATHERINE BOCCACCIO
|“Our vision has been to design and build the highest-quality enclosed fashion mall that sets the standard for the industry, and certainly for the New York City area,” said Sam Shalem, chairman and CEO, Prestige Properties.
||Amenities for the enclosed fashion mall include desirable food court options with expansive views of the surrounding retail.
When The Mall at Bay Plaza opens to the public in 2014, adjacent to the highly successful outdoor Bay Plaza Shopping Center, it will be heralded as the first enclosed fashion mall in the New York City area in nearly 40 years.
That’s big news. Particularly at a time when new development has taken a back seat to redevelopment of existing assets.
The owner of the Northeast Bronx 1.3-million-sq.-ft., 25-year-old Bay Plaza Shopping Center, Prestige Properties, isn’t cutting any corners on the $300+-million development project that will add a 780,000-sq.-ft., first-class, enclosed retail mall along with an 1,800-car parking garage. In fact, the New York-based company is pulling out all the stops, injecting luxury after luxury into the prized property.
“Our vision has been to design and build the highest-quality enclosed fashion mall that sets the standard for the industry, and certainly for the New York City area,” said Sam Shalem, chairman and CEO, Prestige Properties.
To do that, Shalem and his team sourced a world-class architect – Altoon Partners out of Los Angeles – and charged them with creating an iconic property comprised of timeless, classic and elegant elements and materials.
“We spared no expense,” said Shalem. “We are building something that we – and the community – will be proud of.” The trade area will be substantial, as consumers from the surrounding area – counties of The Bronx, Westchester and Manhattan – are projected to shop the state-of-the-art destination ideally situated at the crossroads of The Bronx and Westchester – specifically, on a corner parcel at the intersection of the Hutchinson River Parkway and Interstate 95 where a combined 250,000 cars pass a day.
Not surprisingly, the retail response has been huge. Macy’s will build a three-story, 160,000-sq.-ft. store – its first ground-up project in New York in 15 years – and join the existing J.C. Penney as a mall anchor. Current tenants of the existing Bay Plaza Shopping Center – some of the national chains’ highest-performing stores on a per-sq.-ft. basis – are expected to further ramp up results in the new iteration.
New retailers will join the property as well. “We’re bringing in major name brand and designer stores, ranging from fashion, accessories and home furnishings to restaurants, a health club, entertainment and a host of desirable amenities,” said Jerry Welkis, who along with Allen Cooperman of Welco Realty Inc., are leading leasing efforts on behalf of Prestige. “Leasing has been progressing exceptionally well.”
Given that the existing outdoor shopping center has been a retail mainstay for 25 years, it is expected that the new high-end enclosed sister property, new amenities, new anchor and new experience will serve only to energize the shopping environment and spur sales at the entire project.
“Retailers are buzzing about The Mall at Bay Plaza,” said Welkis. “And Prestige is giving them something worth talking about. In my opinion, this is THE project for 2014, bar none.”
For leasing information, contact Welco Realty Inc., 914-576-7500 :
Jerry Welkis, firstname.lastname@example.org
Allen Cooperman, email@example.com
James O’Brien, JOBrien@welcorealty.com
Source url: http://chainstoreage.com/article/fashion-first
JANUARY 14, 2013
The dense markets of northern and central New Jersey are showing some encouraging signs of momentum. Over the past 18 months, retailers have flocked to places like Paramus, Millburn, Wayne, Totowa, Springfield/Union, Livingston, East Hanover and Jersey City/Secaucus, to name a few. They are well aware that the major malls and retail corridors of Northern New Jersey, in particular, draw lots of traffic from nearby New York City. The pace of new construction has been sluggish in part because lenders now demand equity stakes of around 40 percent on projects that used to be financed at 70 or 80 percent. Therefore new supply is limited, which is helping to push up rents and drive down vacancies.
In the northern and central parts of the state, in fact, the vacancy rate now stands at about 10 percent—a big improvement over the 20 percent average of 2010. Paramus, the state’s top retail market, has seen quite a nice recovery. Here, rents of smaller stores of less than 3,000 square feet now range from $35 to $60 per square foot. At stores of 5,000 to 10,000 square feet, space is leasing for between $30 and $40 per square foot. Paramus’ medium boxes, which range in size from 20,000 to 30,000 square feet, are seeing healthy numbers but quite a bit more rental-rate variability (while deals of $11 or $12 are not unheard of, most of these midrange spaces lease for a respectable $20 to $30 per square foot). Ground rents for the largest spaces in the market—the 100,000-square-foot behemoths—typically run between $8 and $12 per square foot.
Expanding tenants include New York-based supermarket chain Fairway Supermarket; Connecticut-based supermarket chain Stew Leonard’s, which is mulling whether to bring its 65,000-square-foot concept into New Jersey; and a host of QSR chains, including Five Guys Burgers and Fries, Smashburger, Chipotle, Qdoba—you name it. Zinburger, which now has a bustling location in Clifton, is a good example of what these chains offer to those who are tired of fast food. Health clubs are another fast-growing category. Equinox, a higher end example charging up to $125 a month, as well as its smaller, lower-priced concept called Blink, has been very active in this market. Retro Fitness, Planet Fitness, and mid-tier mainstays like LA Fitness continue to expand as well.
Despite this growth, however, there are challenges. Competition from online retailing, for example, clearly is part of the reason Best Buy, Staples and B.J.’s Wholesale Club are shrinking their footprints around New Jersey. Known for its 20,000-square-foot prototype, Staples is even squeezing into spaces half this size. B.J.’s still operates cavernous boxes, but in select markets it is considering opening 65,000-square-foot stores.
It seems likely that rents, vacancies and property values will continue to improve into 2013. It will be interesting to watch what happens with newer projects like 99 Hudson Street in Jersey City, Bergen Town Center in Paramus and Xanadu Meadowlands in East Rutherford, which just made a deal with DreamWorks to be part of the project. The latter project, a 3 million-square-foot giant by Mall of America’s Triple Five Group, is slated to open in 2014. The aim is to energize the defunct Xanadu albatross by building a ski dome, skydiving simulator and various other amusement park-type amenities, along with a robust retail lineup. Other developers, including Hartz Mountain Industries, Vornado Realty Trust, Pagano Development Co., Gabrellian Associates, TREECO, Key Properties, Ciancia Organization and National Realty, are also poring over freshly drawn plans in the market.
While these New Jersey markets have yet to return to their prior peaks, newfound activity is leading a greater sense of optimism—and some real opportunities.
— Jerry Welkis is an X-Team International partner and president of New Rochelle, N.Y. based Welco Realty.
MID ATLANTIC Real Estate Journal – Shopping Centers - March 29 – April 11, 2013
HomeGoods at Edgewater Harbor
EDGEWATER, NJ - HomeGoods, TJX Companies’ off-price home fashion retailer, is set to open its newest New Jersey location at Edgewater Harbor, announced Levin Management. The 24,000 sf store anchors the 100,000 sf retail component of this premier mixed-use development. Levin’s leasing representative Jake Frantzman negotiated the long-term lease. Jerry Welkis of Welco Realty represented HomeGoods in the transaction. “Redevelopment efforts spanning from Weehawken to Bayonne have really kicked into high gear, making the Gold Coast a magnet for residents as well as retailers,” said Frantzman. “Strong demographics, along with excellent visibility and access, make Edgewater Harbor the perfect location for HomeGoods as it continues expanding through-out the New Jersey market-place.” In addition: A March grand re-opening for the expanded Center for Allied Health & Nursing Education and a newly signed lease with Dollar Tree have kicked off 2013 at Capitol Plaza in Ewing. The recent activity follows several 2012 tenant openings and renewals at the 357,000 sf retail property.
Michael Cohen, Levin Management’s vice president of leasing, served as in-house representative for each transaction. Also, Hand & Stone Massage and Facial Spa has newly opened a 2,166 sf location at The Shoppes at North Brunswick in North Brunswick. Levin’s leasing representative Frantzman negotiated the long-term lease. Todd Sussman of Colliers International served as the tenant’s broker in the transaction.
Link to article: http://digital.turn-page.com/t/26119 page 33.
August 15, 2012
Bronx: Bay Plaza Shopping Center – Torrid – 1,500 sf
Bronx: Bay Plaza Shopping Center – Dallas BBQ – 13,000 sf
Bronx: (Riverdale) – Garden Gourmet Supermarket – 10,000 sf
Kingston: Dena Marie Plaza – Party City – 12,441 sf
New York: East 65th Street – Pier 1 Imports – 18,307 sf
Plainview: Kuzina Caberet – 1,600 sf
Yonkers: Yonkers Gateway Shopping Center – Pier 1 Imports – 11,375 sf
East Hanover: Castle Ridge Plaza – Carter’s – 4,000 sf
Edgewater: Home Goods – 24,000 sf
Englewood: Palisades Court – La Ziza – 2,050 sf
Newark: Jackie’s Kids – 9,141 sf
North Brunswick: BJ’s – 109,212 sf
Paramus: Bassett Furniture – 20,8720 sf
Ramsey: Chipotle – 2,200 sf
Sarku Japan – 1,960 sf
Ulta Cosmetics – 10,080 sf
Wayne: Brentwood Plaza – Modell’s – 15,000 sf
Woodland Park: Fairway Supermarkets – 63,000 sf
Bridgewater: Bridgewater Towne Center – Party City – 12,541 sf
Clifton: Clifton Commons – Walter Bauman Jewelers – 3,226 sf
Ramsey: Interstate Shopping Center – Jo-Ann Fabrics – 9,800 sf
West Orange: Petco – 11,760 sf
Published: JUNE 25, 2012
Welco Realty, Inc., based in New Rochelle, New York represented Fairway Supermarkets (63,000 s.f.) at Plaza 46, Woodland Park, New Jersey. For more information about Fairway Supermarkets, contact Mr. Jerry Welkis at firstname.lastname@example.org or Allen Cooperman at email@example.com
About Fairway Woodland Park
“Fairway Market opened its first store in NJ in Paramus in 2009. We are excited to bring to Woodland Park all of the things that have made Fairway Market a food store legend. Bask in over 63,000 sq. ft. of the freshest produce, piled high and delivered daily; hand-selected USDA prime meats, custom cut the old fashioned way by a trained butcher; a huge assortment of wild and local-caught seafood, some caught by our own head of seafood, Captain Tony Maltese; more than 600 artisanal cheeses; the largest selection of the highest quality imported specialty items that you won’t find anywhere else; Fairway’s famous directly imported barrel olive oils from the most recent harvest, available at such ridiculously low prices you won’t believe the value; nearly 100 coffees from all over the world, made from the highest quality, hand-picked Arabica beans freshly roasted on premises; hand-crafted baked goods and legendary NY bagels; hand-pulled fresh mozzarella made daily; an extremely impressive selection of organic, natural and gluten-free foods; plus a large selection of traditional groceries. We are proud to bring to Woodland Park an extensive kosher offering including a large selection of OU certified poultry and meats, and KOF-K certified meats and poultry cut in-store with a Mashgiach on premises. Also, don’t miss our KOF-K certified bakery, premises-roasted coffees, kosher rotisserie chickens, Fairway EVOOs, fresh kosher fish selection, and fresh nut butters. You have to see it to believe it. Visit www.fairwaymarket.com"
Published: JUNE 12, 2012, By JULIE SATOW
Indoor malls in New York have received a mixed reception. Outlets like Pier 17 at the South Street Seaport and the Albee Square Mall in Downtown Brooklyn have posted lackluster performances. But the shops at the Time Warner Center and the Manhattan Mall in Midtown have generally been considered successes.
So the developers of the first suburban-style fashion mall to be built in New York City in nearly 40 years — an indoor shopping center with several levels and bookended by department stores — are taking something of a chance.
The Mall at Bay Plaza, a 780,000-square-foot behemoth, broke ground last month in the Bronx and is scheduled for completion in 2014, at a cost of $300 million. Its developers, Prestige Properties, point to several factors that they say will ensure its success.
The mall’s location, at the crossroads of the Hutchinson Parkway and Interstate 95 near Co-op City in the Bronx, is convenient to residents inside the borough as well as to suburban communities in Westchester County, the developer said. Some 1.4 million people live within a 10-mile radius. And two strong anchor tenants, J. C. Penney and Macy’s, are on board.
“This is an underserved market and we are confident it will draw crowds,” said Sam Shalem, the chairman and chief executive of Prestige Properties. Prestige acquired the land on which the mall is being constructed in 1985, and it is part of a 78-acre site. The mall will be adjacent to the outdoor Bay Plaza Shopping Center, which has more than one million square feet of retail, including big-box stores like Barnes & Noble, Kmart and P. C. Richards, and 150,000 square feet of commercial office space. On the larger swath of land it owns there, Prestige has plans to eventually build residential towers, Mr. Shalem said.
The mall will create more than 2,000 construction jobs and 1,700 permanent jobs, according to the city and the developer. Prestige “is casting a major vote of confidence in the future of the Bronx and the future of New York City,” said Mayor Michael R. Bloomberg at the recent groundbreaking at the site, which was also attended by local officials.
Barry Fishbach, an executive vice president at the retail brokerage firm RKF, said having an outdoor mall next door would help attract shoppers.
The existing 150,000-square-foot J. C. Penney at the Bay Plaza Shopping Center will be attached to the new mall and join a new, ground-up Macy’s department store as the anchor tenants.
The decision by Macy’s to build a three-level, 160,000-square foot store at the site is a main reason Prestige Properties is moving ahead with developing the mall. “We had been talking to Macy’s for years, but we finally showed them the light,” Mr. Shalem said, “and it was in large part because a number of other stores in the shopping center, including J. C. Penney and Kmart, are in the No. 1 range for their respective chains” in terms of sales.
Randy Scalise, the regional director of stores for Macy’s, said, “We had been interested in the site for years, but with the economy now stabilizing, we are now able to invest in new stores.” The new location, he added, “allows us to infill our store count in the region and makes a lot of sense for us. There is not a lot of mall development in the U.S. right now and the New York metro area is a good market to be in.”
Peter Ripka, a partner at the retail brokerage firm Ripco Real Estate, which is not involved in the marketing of the development, said that having two anchor tenants and being in a prime location were both good indicators of success. “You have to love a site that has access from two major highways,” he said. “A good highway network means people can come from a large radius.” There will also be some 230 buses stopping daily at the mall.
There is little direct competition in the area. The closest fashion mall is the Cross County Shopping Center in Yonkers, which is north and west of the Mall at Bay Plaza. The other option in the Bronx is the Gateway Center in the Bronx Terminal Market, which does not have a fashion focus.
“The Gateway Center in the Bronx Terminal Market is more of a vertical power center, which means it is more like a shopping center and won’t have similar fashion retailers,” Mr. Ripka said.
The Mall at Bay Plaza will include an 1,800-spot parking garage and as many as 80 smaller retail stores. Asking rents will range from $100 a square foot to more than $200 a square foot, said Jerry Welkis, the president of Welco Realty, a retail brokerage firm. With his partner Allen Cooperman, a principal, he is spearheading the leasing at the Mall at Bay Plaza. They have been marketing the mall since January.
Potential tenants who are in discussions to lease space at the mall include Aéropostale, H&M, Express, the Gap and Victoria’s Secret.
In addition, the mall is in negotiations to sign a 40,000-square-foot health club, and is creating a food court with about 10 vendors. It is in talks with the Cheesecake Factory, Maggiano’s Little Italy, Brio Tuscan Grille and Texas de Brazil to open two or three sit-down restaurants, and to sign up some fast casual restaurants, including possibly Bobby’s Burger Palace and Chipotle Mexican Grill. Other nonfashion tenants it has spoken with include the jewelry chain Zales, Build-a-Bear Workshop and Brookstone, Mr. Welkis said.
The structure of the mall, with Macy’s on one side and J. C. Penney on the other, is also ideal, Mr. Welkis said. “The mall is short, so the specialty retailers won’t get lost as people walk between the J. C. Penney’s and Macy’s; they will be clearly visible.”
“We are creating a suburban fashion mall in an urban environment,” Mr. Welkis said, “but the key to the success is that we have great anchors.” He continued, “Macy’s is considered a fashion outlet while J. C. Penney has tremendous reach as a moderately priced department store, so we are offering the best of both worlds.”
posted May 15, 2012 7:09 AM by Bronx News
BRONX, NEW YORK, May 14— Mayor Michael R. Bloomberg, Bronx Borough President Ruben Diaz Jr. and other local elected officials joined Prestige Properties at the ceremonial groundbreaking of the Mall at Bay Plaza, the developer's new $300 million, 780,000-square-foot enclosed fashion mall that will include a 1,800-car parking garage -- the first retail development of its kind in New York City in almost 40 years.
One of the largest projects currently underway in the borough, the Mall at Bay Plaza is slated to open by spring 2014, and will create more than 2,000 construction jobs and more than 1,700 permanent jobs. The new state-of-the-art Mall at Bay Plaza -- with a new Macy's and an existing JC Penney as its anchors -- is now under construction on a premium visibility corner at Prestige's thriving Bay Plaza Shopping complex and will bring what is already New York City's largest shopping center to approximately 2 million total square feet upon completion.
"With this new $300 million project, Prestige Properties is casting a major vote of confidence in the future of the Bronx, and the future of New York City," said Mayor Bloomberg. "That's a smart bet. These days, the Bronx is building and our city's future is bright - thanks to new jobs and investments like this."
"Macy's is excited to be a new retail anchor in the expansion project of Bay Plaza Shopping Center. The vision by Prestige Properties to redevelop the site into a fashion mall will make the brand-new Mall at Bay Plaza a destination for shoppers, and better serve the ever-growing and dynamic Bronx community," said Randy Scalise, senior vice president and regional director of stores for Macy's. "The redevelopment and expansion of the mall is a plus for retail in New York City, and a major moment for Macy's as it will allow us to open our second store in The Bronx."
"The Mall at Bay Plaza is a wonderful addition to the Bronx, bringing new jobs, new businesses and a new Macys. This entire project furthers the excitement and economic opportunities in our borough," said Bronx Borough President Diaz. "I want to thank Prestige Properties for their long-standing partnership with the Bronx. Their commitment to expanding here is a further testament to their faith in all that the Bronx has to offer."
Located at the intersection of the Hutchinson Parkway and 1-95, the new Mall at Bay Plaza has already drawn intense interest from dozens of other national and regional retailers eager to lease space at a destination that serves more than 1.4 million residents in just a 10-mile radius.
"New Yorkers deserve an elegant, state-of-the-art shopping destination and with the Mall at Bay Plaza we are excited to bring such a project to the Bronx," said Prestige Properties CEO & Chairman Sam Shalem. "We thank Mayor Bloomberg, Bronx Borough President Diaz, Macys, JC Penney and the people of the Bronx for their ongoing support, and look forward to our continued, shared success."
"The Mall at Bay Plaza provides retailers with a remarkable option to enhance their presence and further connect with shoppers," said Welco Realty Principal Jerry Welkis, who along with Allen Cooperman leads all Bay Plaza leasing efforts on behalf of Prestige Properties. "The existing retail center is already a powerhouse destination, with an ideal location and convenient access to highways and transportation. The latest addition will only further attract a diversity of shoppers from all across the surrounding community."
NOV 11, 2011 11:57 AM, STAFF REPORTS
Prestige Properties will develop The Mall at Bay Plaza, a $270 million, 780,000-sq.-ft. fashion mall in the Bronx. The mall will be located on a corner parcel at Prestige-owned Bay Plaza Shopping Center and will use an existing JC Penney as one of its anchors. A 160,000-sq.-ft. Macy’s will serve as the second anchor. The property will also feature a 1,800-car parking garage.
The developer plans to break ground on the project in the spring of 2012, with opening scheduled for late 2013/early 2014.
“We have had excellent success at Bay Plaza since its inception, and we are pleased and excited to bring this best-in-class, enclosed fashion mall to our community and the Bronx,” said Prestige Properties CEO and Chairman Sam Shalem in a statement. “We thank Mayor Bloomberg, Bronx Borough President Diaz and the people of the Bronx for their continued support and patronage.”
Jerry Welkis and Allen Cooperman, of Welco Realty, will handle the leasing efforts for Bay Plaza on behalf of Prestige Properties.
The project will create more than 2,000 construction jobs and more than 1,700 permanent jobs.
New Rochelle, New York, September 16, 2011 - Welco Realty, Inc. is pleased to announce that it has arranged a lease representing Pier 1 Imports in the following location:
- Rego Center, Queens, NY – 8,500 sf
Welco Realty represented both the landlord and the tenant in the following two locations:
- Bay Plaza Shopping Center, Bronx, NY – 9,599 sf
- Summerhill Square, East Brunswick, New Jersey – 9,000 sf
July 28, 2011 - Welco Realty, Inc. is pleased to announce that it has arranged a lease representing TJX Companies for a new Marshalls store in The Boulder Run Shopping Center in Wyckoff, New Jersey.
July 22, 2011 - Welco Realty, Inc. is pleased to announce that it has signed a lease representing T J X Companies on a new Home Goods store in the Veteran’s Square Town Center in Lyndhurst, New Jersey. The shopping center is anchored by ShopRite supermarket.
As seen in The Record, July 3, 2011. Click here.
For most of the 1990s and 2000s, the mantra of the nation’s major retail chains was, "Supersize my store." Now, retail landlords and real estate brokers are hearing a different refrain: "Do you have anything smaller?"
Some of the same retailers who built their businesses with big boxes — stores of 40,000, 60,000, or in the case of Wal-Mart Stores Inc., 100,000 square feet of selling space — have decided that smaller is better. That’s a trend with big implications for North Jersey shopping centers, malls and developers.
|Landlords are subdividing superstores, and reinventing their shopping centers to respond to the trend. "As tenants reduce their footprints, [landlords] are going to need more tenants. And that means they need to have a broader-based shopping environment," said Glenn Brill, a managing director in the Real Estate Solutions practice of FTI Consulting, who has worked on a number of New Jersey retail developments.
Power centers — freestanding large stores that house chains such as Staples Inc., Best Buy Co. and Home Depot Inc., ringed around a common parking lot — were developers’ pet projects before the recession. Now, community centers, better known as strip malls in North Jersey, are the favorite retail configuration, because they have more options for small and mid-sized stores.
"The sweet spot now for the medium-size boxes is in the 10,000- to 20,000-square-foot range," said Chuck Lanyard, president of The Goldstein Group, a retail brokerage firm based in Paramus. "We’re going to see smaller and smaller stores, and that’s probably going to be the wave of the future."
Three factors are driving the downsizing trend, retail analysts and brokers said. First, retailers need to increase their sales per square foot in a rough economy. Second, the Internet is changing the way people shop, and pushing retailers to increase profit margins at their brick-and-mortar stores. Third, shoppers, particularly aging baby boomers, are tired of schlepping through superstores.
"In retail, one of your key measures of productivity is sales per square foot. What’s been happening in the big-box stores is that number has been pretty stagnant, and possibly even going down," said James Dion, president of Dionco Inc., a retail consulting firm based in Chicago. Retailers’ corporate reports and retail analysts have been documenting that trend since the recession hit.
In recent years, Dion said, Best Buy, Wal-Mart and other large chains have been suffering price deflation that has hurt sales per square foot. "A 42-inch plasma TV that five years ago they were selling for $5,000 is being sold for $600, so their sales per square foot are definitely going to take a hit," he said. "You have to stand back as a merchant and say, ‘I pay for every square foot I have, so clearly the smaller the footprint, the more productive I am.’ "
The Apple stores are the stellar example of being highly productive in a small space. Apple stores, Dion said, at an average size of 6,000 square feet, have sales of almost $6,000 per square foot of selling space, compared with $300 for Wal-Mart, $895 for Best Buy and less than $200 for most department stores.
Consumers today want stores to "edit" or limit the choices, rather than overwhelm them with dozens of options for each product category, Dion said. "We know [from studies] that when customers are confronted with too much choice, they don’t make a choice," he said.
The ease of Internet shopping also has made consumers less patient with hard-to-shop superstores. "We have made online so easy to shop," Dion said, "and yet brick and mortar has really fallen behind," he said. "The big boxes in particular are struggling with the navigation concept. How do I make my store as easy to navigate as my website?"
As online sales become a bigger source of revenue for retailers, large superstores are becoming less important, Brill said. Retailers "are going to demand higher margins from their stores, and they’re only going to want to have high-performing stores. You start to think about having fewer stores, and the stores you do have you expect their margins to be not dissimilar from the margins you’re getting on the Internet." Those margins vary with each retailer, but online sales obviously require less overhead than a brick-and-mortar store, Brill said.
Jerry Welkis, president of Welco Realty, and a member of X Team International, a consortium of retail brokerage firms, represents a number of North Jersey landlords, as well as retailers looking for spaces. These days, the top thought in retailers’ minds is, "How can we get more productivity — do the same kind of sales volume in a smaller space — and make more money for the bottom line," he said. As part of that trend, he has seen retailers such as shoe discounter DSW switch from favoring 30,000- to 35,000-square-foot stores to 17,000- to 19,000-square-foot spaces, and office supply chain Staples downsize to 15,000 square feet from a 20,000- to 22,000-square-foot format.
In some cases, Welkis said, retailers are developing smaller-store formats in order to have more flexibility to go into new locations. Sporting-goods chain Modell’s recently opened a store in the Interstate Shopping Center in Ramsey that at 8,900 square feet is about half the size of its typical stores. Toys "R" Us, he said, has three size formats for its new combined Toys and Babies "R" Us stores — 30,000 square feet, 45,000 square feet and 60,000 to 70,000 square feet.
Welkis said retailers are increasingly realizing that one size doesn’t fit all markets. Paramus, which generates high sales per square foot, will continue to have more large-size stores than smaller and less-affluent markets, he said.
But even in Paramus, "retailers want to get more productivity out of their stores and where they feel they can downsize and not sacrifice volume, they’re going to do that," Welkis said.
Bed Bath & Beyond Inc. Chief Executive Officer Steven Temares, in an interview at the company’s recent annual meeting, said finding the right size for the market is more important than jumping on the downsizing trend.
"We always have sized the store for the market," he said. "So we’ve had 18,000-square-foot stores and stores in excess of 100,000 square feet. New Jersey, where there’s great density, good income, generally speaking supports a larger store. In Vineland, we have a smaller store than we have in Paramus, for example, but we love them both."
Welco Realty, Inc., an X Team partner, announced today that Daffy’s opened its first store in Bronx, New York. One of New York’s major discount apparel retailer chain opened its first store in Bay Plaza Shopping Center, one of the largest strip shopping centers in New York city . Welco Realty negotiated the deal on behalf of the landlord, Prestige Properties & Development Co. Bay Plaza is over one million sf shopping center that has grown over the last twenty years to include such notable tenants such as Barnes & Noble, JCPenney, Old Navy, Marshall’s, P.C. Richards, Kmart, Modell’s, AMC Theatres, Staples, Toys R Us, Babies R Us and many more national & regional chains. The inclusion of Daffy’s coming into Bay Plaza and the recent opening of other apparel retailers such as Children’s Place and Carter’s will just improve the existing apparel mix in the shopping center.
Welco Realty, Inc., an X Team partner, announced today that it has signed a lease representing Jo-Ann Fabric and Craft Stores for 30,000 sf. for a flagship store in the former Comp USA space on Route 17, Paramus, New Jersey. This store will be one of the largest format stores for Jo-Ann Fabric and Craft Stores, its first store in the Paramus market. Jo-Ann Fabric and Craft Stores is also expected to draw from the metropolitan New York area as well as New Jersey because of its close proximity to New York.
Welco Realty, Inc., an X Team partner, announced today that it has signed a lease with Modell’s Sporting Goods for their new smaller concept store. The first one that they have opened in New Jersey at the Interstate Shopping Center, Route 17, Ramsey. This store is approximately 8,551 s.f., which is approximately half the size of their standard store. The first store that they opened under this format was in Amsterdam Avenue in Manhattan.
For more information, contact Mr. Jerry Welkis at firstname.lastname@example.org.
As seen in the Mid Atlantic RE Journal Year in Review Dec. 2010. Click here.
Paramus, NJ – Welco Realty, Inc. has leased space at Paramus Towne Square. XSRE leased 20,000 s.f. of the former Circuit City space. Marshalls Shoe Megashop has leased 10,000 s.f., which will be their second Shoe Megashop in New Jersey.
Paramus Towne Square is one of the premier shopping centers on Route 17 in Paramus. Only one end cap space remaining in the center, 21,000 s.f., which can possibly be divided. Other tenants in the center include Michael’s, Buy Buy Baby, Golfsmith, Chef Central, Dick’s Sporting Goods and Ramsey Outdoor.
Welco Realty signed leases in Summer Hill Square, a new 157,000 s.f. center development on Route 18, East Brunswick. Annie Sez signed 11,000 s.f. David’s Bridal signed 10,000 s.f. Other tenants include Babies/Toys R Us, Men’s Wearhouse & Moe’s Suthwest Grill. There are a few stores still available.
North Bergen, NJ - Burlington Coat Factory, a national retail chain offering current, high quality, designer merchandise at competitive prices, will open a 70,320 square foot store in Tonnelle Plaza Shopping Center on November 12. Tonnelle Plaza Shopping Center is owned by developer Hartz Mountain Industries. This new store will be the first in North Bergen, the twenty sixth in New Jersey, and will serve as Tonnelle Plaza's anchor store. Burlington shoppers will benefit with everyday savings of up to 70 percent off department store prices. In addition, Burlington will employ approximately 75 area residents in sales and management positions. "The new Burlington will appeal not only to local shoppers by providing a unique shopping experience for the entire family, but the local community will also benefit," says Thomas Kingsbury, President and CEO of Burlington Coat Factory. "We are thrilled to bring jobs to North Bergen with the opening of this new store." The North Bergen store will feature a wide variety of the latest trends in ladies' dresses, suits, sportswear, maternity and accessories; top name men's suits and sportswear; quality, name brand shoes for men, women and children; famous label clothes for kids of all ages, and of course – coats - the largest selection of coats in the nation with more than 5,000 to choose from. "The addition of Burlington Coat Factory is mutually beneficial to both the shopping center and Burlington," said Emanuel Stern, president and chief operating officer of Hartz Mountain Industries. "The Tonnelle Plaza location provides Burlington access to their core demographic, while Burlington's reputable name will draw many more patrons to the shopping center, benefiting the stores and services already present." Jerry Welkis, president of Welco Realty Inc., represents Tonnelle Plaza on behalf of Hartz. "The addition of Burlington Coat Factory will ensure present and potential tenants a continuous flow of shoppers. Two units of 7,238 s.f. and 5,200 s.f. remain available. Once Burlington is open, I expect both spaces to be leased quickly."
For more information, contact Mr. Jerry Welkis at email@example.com
Empty stores in November are a retail landlord's nightmare before Christmas. However, in North Jersey the retail leasing landscape is less scary this year than it was a year ago.
Welco Realty just announced a deal to lease half the 40,000-square-foot Circuit City store in Paramus Towne Square on Route 17 to XSRE, a fashion accessory retailer.
Real estate brokers and property managers said an increase in leasing activity in recent months is absorbing a significant amount of the empty square footage that pushed North Jersey retail vacancy rates to their highest level in more than a decade.
A string of retail bankruptcies and store closings lifted the retail vacancy rate for northern and central New Jersey to 8.18 percent in July 2009 from 5.21 percent a year earlier. This past July, the rate remained about the same, at 8.16 percent, according to the annual survey by The Goldstein Group, a brokerage firm based in Paramus. The vacancy rate on Route 17 in Paramus, the prime retail corridor in the state, was 10 percent in July, down from 11.5 percent a year earlier. The vacancy rate measures only empty stores along highways, not in downtowns or enclosed malls.
Landlords have gotten creative in filling their spaces in the face of a surplus of vacant stores. Emil Geering, owner of the Tower Records store on Route 17 in Paramus, found an unusual new tenant in Goodwill Industries.
In recent months, some of the shuttered big-box stores that contributed to that rate have been leased, or are close to landing tenants, as retailers are deciding that the time is right to make a deal.
"The feeling is not that things are necessarily going to get better, but that things are going to stay the same. So the rents aren't going any lower and yet retailers can make money with the deals they still can make with a landlord," said Chuck Lanyard, president of The Goldstein Group. Retailers are starting to think they should make deals now, rather than wait and lose good opportunities, he said.
Last year, Lanyard said, retailers still had the attitude that "there was no rush, because whatever I'm looking for will be around." Now, he said, retailers are seeing spaces being leased "so they figure hey, I better get back out there now. The deals are still really good but the inventory is shrinking."
Landlords and real estate brokers have found creative ways to fill some of the big-box stores in Paramus that emptied out during the recession, but some long-term unleased properties remain among the repurposed ones.
The long-term unleased:
- Former Circuit City store at 240 Route 17 north in Paramus Towne Square, divided into 20,000-square-foot XSRE fashion accessory store and other spaces.
- Former 14,000-square-foot Tower Records at 809 Route 17 north leased to Goodwill.
- Former 120,000-square-foot Levitz Furniture store at 545 Route 17 south divided into 40,000-square-foot Ashley Furniture store and three other spaces.
Circuit City site
- Seaman/Levitz store, 55 Route 4; 22,364 square feet
- Fortunoff store, 150 Route 17 north; 40,000 square feet
- Home Depot Expo store, 577 Winters Ave.; 90,000 square feet
Welco Realty just announced a deal to lease half the 40,000-square-foot Circuit City store in Paramus Towne Square on Route 17 to XSRE, a fashion accessory retailer. Welco President Jerry Welkis said he is negotiating with other retailers for the remainder of the space. Circuit City filed for bankruptcy in 2008 and began closing its stores the following year. The XSRE store is scheduled to open next spring.
Welkis' company also recently brokered a deal to bring a 10,000-square-foot Marshalls Shoe Megashop to Paramus Towne Square, the second Marshalls shoe store in New Jersey.
Still, some leftovers from the wave of bankruptcies that rocked the retail world in 2008 still remain, including a former Linens 'n Things store in the Totowa Square shopping center on Route 46.
Even Paramus, one of the most sought retail addresses in New Jersey and on the East Coast, has several large properties that fall in the category of long-term unleased — vacant for two Christmases or more. But those properties tend to have disadvantages such as limited parking or less-than-ideal access from the highway that make them more difficult to re-lease.
The former Seaman's/Levitz store on Route 4 in Paramus has been without a permanent tenant for close to four years, although it has had several temporary tenants during that time, including most recently a Spirit Halloween store. That 22,000-square-foot space has a problem typical of vacant furniture stores — lots of space inside to display furniture, but not much parking space outside, because furniture stores usually have a small number of customers at any one time.
Another property that presents a leasing challenge is the 90,000-square-foot Home Depot Expo store on Winters Avenue, just off Route 17 in Paramus. The Expo store, an experiment in upscale design by Home Depot, has been vacant for 18 months, and its large size and location off the highway make it a tougher sell.
The Expo store, which opened in 2001, was a product of a building boom in retail, when bigger was considered better. Now landlords are learning that they have to be willing to divide their big-box spaces into smaller stores to land tenants.
Jeremy Isaacs of Ripco Real Estate, the brokerage firm for the Expo building, said dividing that space could be a possibility. "We are looking at all options" and working on new uses for the building, he said.
Over the past year, landlords have gotten creative in filling their spaces in the face of a surplus of vacant stores. Emil Geering, owner of the 14,000-square-foot Tower Records store on Route 17 in Paramus found an unusual new tenant in Goodwill Industries, which opened a thrift store there in July. ARC Properties Inc. of Clifton divided the 120,000-square-foot former Levitz site on Route 17 into four stores to give new tenants, in effect, a "cut to fit" space.
Lanyard said some of the most sought-after spaces are in the 10,000-square-foot-and-under range. Welkis said he is seeing a lot of interest in spaces suitable for food franchises, such as Five Guys or Smashburger. "We get a zillion calls for spaces in the 2,000-, 2,500-, 3,000-square-foot category, but we're also getting calls for 10,000, 12,000, 20,000 square feet." Welkis said. "It really depends on the retailer. The one commonality is everybody's trying to squeeze" — take the least possible amount of space for a viable store in order to maximize profits.
Welkis said the Marshalls Shoe Megashop and XSRE stores will bring a needed fashion component to Paramus Towne Square, and be complementary tenants for BuyBuy Baby, Chef Central and the center's other retailers. "They will bring a little more fashion to the center. That was one of the objectives we had," he said. "Women drive the sales of shopping centers, so the more retailers we can bring in that will bring the women in the better."
XSRE, a new chain, also is opening stores on Long Island and at the Palisades Center mall in West Nyack, N.Y.
Paramus Towne Square was hit by two big-box closings — Circuit City and Linens 'n Things — after those retailers folded. The 60,000-square-foot Linens store was quickly re-leased to Dick's Sporting Goods, which opened there this spring.
In addition to deals with new tenants, lease renewals by existing tenants have been an encouraging sign of an improving climate, said Matthew Harding, president and chief operating officer of Levin Management, a property brokerage and management firm based in Plainfield. Levin Management oversees more than 12 million square feet of retail space in New Jersey and five other states. Its North Jersey properties include the Paramus Place center anchored by Kohl's on Route 4 in Paramus and centers in Clifton and Edgewater.
"We're seeing pretty strong renewals and extensions of leases, which is a very important component to maintaining occupancy and the general health of the market," Harding said.
While the market has stabilized in recent months, "it's a little bit of a delicate balance still," Harding said.
"There are tenants out there looking for space, but they have a lot of choices these days. They're really looking to get into the top-flight Class A retail properties," he said.
As a result, his company is "doing a number of renovations now to keep our properties at the top of the market," including a project at a shopping center at Route 46 and Van Houten Avenue in Clifton.
North Jersey's retail vacancy rate of 8 percent still is significantly lower than the national average of 15 percent, Lanyard said. "If we're averaging 15 percent nationally, and only 8 percent in Jersey — it means in a way we're almost in a tight market," he said.
New Rochelle, New York, October 26, 2010 — Welco Realty, Inc., an X Team partner, announced today that it has leased two spaces in Paramus, New Jersey. One to XSRE & the other to Marshalls Shoe Megashop. 1) XSRE, a new woman’s accessories store concept – leased 20,000 sq. ft. of the former Circuit City space. 2) Marshalls Shoe Megashop – leased 10,000 sq.ft., which will be their second Shoe Megashop in New Jersey. (www.marshallsonline.com)
Paramus Towne Square is one of the premier shopping centers on Rt. 17 in Paramus, which unfortunately got hit with two major tenant closings due to bankruptcy. A 60,000 sq.ft. Linens & Things & a 41,000 sq.ft. Circuit City. Through Welco’s leasing efforts we were able to lease the former 60,000 sq.ft. Linens & Things to Dick’s Sporting Goods and half of the former Circuit City box was just leased to XSRE, a new woman’s accessories store concept. Only one end cap space remaining in the center, 21,000 sq.ft., which can possibly be divided. Other tenants in the center include Michael’s, Buy Buy Baby, Golfsmith, Chef Central, Dick’s Sporting Goods and Ramsey Outdoor.
The other two leases signed were in Summer Hill Square, a new 157,000 sq.ft center development on Rt. 18, East Brunswick, New Jersey. 1) Annie Sez 11,000 sq.ft. 2) David’s Bridal - 10,000 sq.ft. Other tenants include Babies / Toys R Us, Men’s Wearhouse & Moe’s Southwest Grill. There are a few stores still available.
New Rochelle, New York, August 5, 2010 — Welco Realty, Inc., an X Team partner, announced today that it has leased five locations.
||Daffy’s – Bay Plaza Shopping Center, Bronx, New York. One of New York’s major discount apparel retailer chain to open its first store in Bay Plaza in the Bronx. 28,000 sf – a portion of the existing Linens & Things. Bay Plaza is over 1 million sf shopping center that has grown over the last twenty years to include such notable tenants such as Barnes & Noble, JCPenney, Old Navy, Marshall’s, P.C. Richards, Kmart, Modell’s, AMC Theatres, Staples, Toys R Us, Babies R Us and many more. The inclusion of Daffy’s coming into Bay Plaza and other apparel retailers such as Children’s Place and Carter’s will just improve the existing apparel mix in the shopping center.
||Burlington Coat Factory – Tonnelle Plaza, North Bergen, New Jersey (74,000 sf) Burlington Coat to take over former National Wholesale Liquidators store and to co-anchor the Shopping Center with A.J.Wright
||Children’s Place – Bay Plaza Shopping Center, Bronx, New York (5,000 sf). Children’s Place to take over a former Ponderosa Restaurant.
||Carter’s – Hylan Commons, Staten Island, New York (4,800 sf). Carter’s to join such premier tenants such as Gap, T.J.Maxx, Annie Sez, Justice, The Avenue, Starbucks, etc.
||Party City – Harriman, New York (13,000 sf)
Posted on June 10th, 2010 in Current Issue of The Dealmakers, Dealmakers - Everything Retail Real Estate
Profile — A monthly column featuring retailers and retail real estate companies
Welco Realty, Inc. is a real estate consulting and brokerage firm offering market analysis, site selection, demographics, competition evaluation and lease negotiation services for retail clients, as well as landlord and shopping center representation. The company has leased millions of square feet of retail space in shopping centers and central business districts throughout CT, NJ, NY and PA, representing both landlords and tenants, and has done it all with an insider’s perspective – the product of its key executives’ strong background in retail prior to forming the company. Principal Jerry Welkis handled operations along the East Coast and eventually an expansion program throughout the northeastern U.S. for Baskin Robbins, and also served as head of real estate in the U.S. for Consumers Catalog Showroom. Principal David Sternschuss served as head of real estate for Lane Bryant for 12 years, as well as assisting general counsel for Bloomingdale’s, and principal Allen Cooperman served with Federated Department Stores and Shopco Development Co. Welco’s business initially focused on tenant representation because of this retailer-oriented past; eventually, the company moved into landlord representation as well, as developers came to Welco requesting help leasing their centers. The company also invests in properties itself on a small level.
“We found that diversification for us as a company is good,” Welkis said. “In times when retailers are doing great and they can’t get enough locations, the retail tenant rep side of our business brings in a lot of revenue. When retailers are not doing well, our landlords find they need us even more because they find it tough to lease and market space, and are looking for people with the relationships, expertise and marketing capability we have.” Over the past year or so, he said, the landlord representation aspect of the business had been much more successful than tenant representation, but within the past several months retailers have been “kicking the tires” and looking to do deals. “I think retailers are seeing some good signs of the economy recovering, and are now taking advantage of some of the reduced rents that might be out there in markets [they] want to get into,” he added.
The recession has had some impact on occupancy at shopping centers the company handles, Welkis said, estimating that lease rates have been reduced by about 10 to 20% overall as retailers – particularly big-box tenants such as Circuit City or Linens ‘N Things – have gone out of business. However, Welco has weathered this and other troubled economic times by remaining “lean and mean” and resisting the urge to overexpand. “During the good times, we were able to service our clients well, but not operate so extravagantly that we had to have a certain amount of income to cover our overheads,” he said. “In the tough times, because we were lean, our cost was in proper ratio to our income.” Also, the loss of some tenants afforded the company the chance to re-merchandise and upgrade the tenancy of centers that had previously lacked available space.
As a tenant representative, Welco tries to function as though it were the client’s in-house real estate department. This entails observing potential sites on weekdays and weekends, talking to other retailers at the site, and generally making sure that the deal is one they would make for themselves, as though it were their company looking at the space. Welco also tries to involve itself in short- and long-term goals for their retail clients, offering input not just regarding real estate, but distribution, advertising within the market in question and other aspects of the business. “I wore several hats with different retail companies,” Welkis said, “and I think that the retailers have a certain respect for us; they know we’ve been in their shoes before. When we look at a site, we look at the company as a whole. We’re not just salespeople; we’re not just trying to lease a space and get a commission. We believe in long-term relationships, and we want the retailer to be successful so that he grows, and grows with us.”
On the opposite side of the business, the company specializes in the handling of difficult leasing projects, and Welkis sited as an example the demalling of Mill Creek Mall, located in Secaucus, NJ, which reopened as a specialty center last year. Initially a 400,000 sq.ft. enclosed mall anchored by a Kohl’s and a supermarket on opposite sides of the structure, the center was having difficulty contending with new major shopping centers opening nearby, and sales had begun to suffer. Welco arranged the buyout or termination of leases at the mall, coordinated the departure of the mall tenants and tore down everything apart from the anchors in order to recreate the mall as a specialty center. New tenants were brought in, including a Toys “R” Us/Babies “R” Us superstore, The Sports Authority, T.J. Maxx, and a Bob’s Furniture that signed recently. “We made lemonade out of lemons,” Welkis said of the project. “It was very difficult because of all the nuances of working with the tenants, and demalling, and convincing big-box retailers that this was a place to be. We created a major retail development in Secaucus; we took a mall that was antiquated and declining, and made a very successful
Current projects for Welco include a 70,000 sq.ft. to 80,000 sq.ft. expansion underway at Summer Hills Shopping Center, located in East Brunswick, NJ. The first phase of the Toys “R” Us/Babies “R” Us-anchored center opened last year, and the expansion, which is slated to include apparel retailers, a sporting goods chain and numerous restaurants, will open during 2011. Welco is also redeveloping a former Loehmann’s-anchored shopping center in Florham Park, NJ. Tenants at the center will include dressbarn and a recently-signed Trader Joe’s. Other projects include a new 100,000 sq.ft. center in Hawthorne, NJ; an expansion of Commerce Plaza in North Brunswick, NJ to feature BJ’s Wholesale Club, and Edison Town Center, a new development with Sam’s Club slated to open as its first tenant.
Most companies have had to revisit the way they approach new opportunities in the past few years, and Welco is no exception. Welkis cited the company’s work with pop-up stores as a creative and beneficial new undertaking, as they allow Welco’s retailer clients to enter into locations on a short-term basis with very little capital expenditure as a means of testing a market. “Retailers in this economy want to take advantage of having a lot more available space in areas that wouldn’t normally have space for them,” he said. “They can go into a market and test it, and not lock themselves in…if the store does well, it gives [the retailer] the comfort level to enter into a longer-term lease.” Also, in cases where centers have large vacancies and are having trouble filling them, the company will often try to enter into short-term leases with pop-up retailers to provide a temporary solution. “It can be a win-win for the landlord and the tenants,” he explained. “It’s a live body in the store, bringing traffic to the center.”
The company has handled temporary leases for companies such as Nine West and Halloween USA, and was recently named master broker throughout the northeastern U.S. for Toys “R” Us Express, Toys “R” Us’ pop-up store program. The company’s area of coverage stretches from the Baltimore and Washington, DC area through New England. Welco is able to address this wider area of coverage thanks to their affiliation with the X-Team, a nationwide, 30-office organization of retail brokers that assist one another with clients and share information, technology and support. “If we didn’t have a relationship with X-Team, it’d be difficult for us to handle that wide an area,” Welkis said. “Our area of dominance is primarily CT, NJ and NY.”
The Toys “R” Us Express stores typically occupy spaces of 5,000 sq.ft. but can range in size from 3,000 sq.ft. to over 10,000 sq.ft., and suitable locations are either vacant or soon to be vacant, and require no tenant improvements. “We have to be somewhat opportunistic, because obviously we need to get these stores open very quickly, and in a very short period of time,” Welkis said.
The benefits for Welco in handling these types of deals are numerous, he explained. The company is able to associate itself with major brands with strong reputations, but short-term lease deals also allow them to establish a relationship with landlords for future projects, should the same center that brought in a pop-up store have other vacancies to fill. Also, he added, short-term leases often lead to other deals the company never would’ve made otherwise. “As we’re looking for locations for these tenants, we’re coming up with sites for other retailers on permanent deals that offshoot from that,” he said. “It gives us a lot of exposure, both on the retail side and on the developer side.”
For more information, contact Jerry Welkis, Welco Realty, Inc., 2525 Palmer Avenue, New Rochelle, NY 10801; 914-576-7500, Fax 914-576-7596; Web site: www.welcorealty.com.
Jerry Welkis, founder and president of Welco Realty Inc., has steadfastly stuck with retail since emerging from New York's Fashion Institute of Technology in the 1970's with his Buying and Merchandising degree in hand.
Welkis, 58, whose venerable New Rochelle, NY-based firm represents retailers, landlords and shopping centers, says he can't imagine working in any other field. "Creativity has always driven me, and retail is so much more creative and exciting than the rest of real estate," said Welkis. "When you build a shopping center from the ground up and bring in tenants that people really love, you are serving a need in the community and creating jobs. You feel like you're achieving something and bettering the world."
The New York native's lengthy curriculum vitae reads like a "Who's Who" of American retailers. His tenant-rep clients include such top performers as AMC Theatres, J.C. Penney, Pier 1 , Party City, Elizabeth Arden, Hobby Lobby, Darden Restaurants, Toys R Us, TJ Maxx, Marshalls, 24-Hour Fitness, Dress Barn, Mandees/Annie Sez and many more.
Upon graduation, Welkis answered a blind ad and got a job with Baskin-Robbins. "They were in a major real estate expansion and needed someone to go around and open stores in malls and secondary locations," Welkis said. "I'd hire someone to manage them, then find a franchisee." Welkis was soon bumped up to Northeast U.S. regional manager during his five-year Baskin-Robbins stint before departing for Fayva shoes, where, as real estate manager for metro New York, he helped build Fayva into a 1,000-store chain. From Fayva, he moved on to a real estate position at Consumers Distributing Company, a Toronto-based catalogue showroom retailer with sales in excess of $1 billion, and later rose to vice president of real estate development and construction for the U.S. division.
Growing dissatisfied with the constrictions of corporate retail, Welkis struck out on his own in the mid-1980s, at a time when very few retailers were outsourcing real estate functions. As a retail real estate consultant, an ambitious young Welkis managed to enlist Mandees and R & S Strauss on one-year retainers. Word of his skills spread, and other signings ensued, including Nine West, Lechters and plus-size clothier Modern Woman.
The successes prompted Welkis to form Welco Realty as an exclusive retail tenant representation firm.
Flash forward to the present, and Welkis' team has leased millions of square feet of shopping center and CBD retail space over a 20 year-plus history, primarily in New York, New Jersey, Connecticut and Pennsylvania. Welkis estimates his business is about 45% tenant rep, 45% landlord rep and 10% development. On the landlord side, Welco has represented prominent developers RREEF, Hartz Mountain Industries, TREECO, and Prestige Properties and Development Company. Welco also represents a well-known portfolio of centers, including: City Place in Edgewater, New Jersey, a major lifestyle center overlooking the Hudson River; Glendale/ Forest Hills Shopping Center in Queens; Harmon Meadow Plaza in Secaucus, New Jersey, a major multi-million-square-foot, multi-use retail, hotel and office development; Bay Plaza in the Bronx, one of the largest shopping centers in the outer boroughs of New York; and, the Plainview Shopping Center on Long Island.
After more than 35 years in the business, Welkis still enjoys working through the widely varied components of the retail equation, from site-research to tenant-mix evaluations to meetings with marketers, architects and designers. "And I still love to get a store or a shopping center opened and see the customers coming and the registers ringing," he said. "It's a win-win for everyone – the landlord, the tenant and the community – if you do it right.”
Tenants and landlords both faced a tough reality in 2009: they’d be far better off replacing their traditionally adversarial relationship with a partnership to assure their mutual health, if not their survival. The name of the game now is filling space. Rather than sacrifice more of their valued tenants, landlords are realizing they have to get creative and offer various incentives, enticements and rent concessions that they wouldn’t have considered at the height of the market just a few years ago.
The deal-making options remain on the table in 2010. Here’s an overview of some of those strategies:
Because shopping center landlords typically have mortgages to pay based on a tenant rent flow, they’re not always in a position to grant steep rent reductions or out-and-out free rent. But what they can offer is free rent, in effect, that’s prorated over several years. This is a win-win for both parties because the retailer is getting the rent adjustment it needs and the landlord isn’t getting beat up from a financing or valuation standpoint.
We also see deals where gradual step-up in rent occurs. For example, if a landlord wants a long-term “market” rent of $20,000 per month, but the tenant can’t reconcile those numbers under present conditions, the landlord might agree to accept something like $12,000 the first year, $14,000 the next and so on until the tenant is paying the full amount, with standard increases set to kick in during ensuing years. This helps the landlords recoup the shortfall and gives tenants more leeway to build their businesses in tough times and eventually gives landlords the market rent they need.
Every deal is critical these days, particularly as shrinking retail occupancies cause “co-tenancy clauses” to kick in for some retailers. This can start a devastating domino effect where one vacancy leads to another. Once a center gets the reputation of being half-empty, it is a disappointment for the landlord, for the tenant and for the consumer.
It is much better to nip the problem in the bud by offering the would-be departing tenant an alternative of half their average rent for six months to a year, which allows them more latitude to re-evaluate their situation. Similarly, many tenants have a “go-dark clause” that allows them to close without reason before the end of their term, even though they’re still obligated to pay rent. In many of these cases, the tenant will agree to keep operating if their rent is reduced. But as with all partnerships, trust is earned—if tenants are seeking rent breaks, they should expect to open their books to show their pain to the landlord.
Landlords can also offer performance-based deals with tenants. For example, a tenant might agree to pay $22 per-square-foot over the first 5 years of a lease if they can generate $300 of sales per square foot, then pay $25 per square foot if they hit $400 per square foot in sales, and so on. Other deals can be structured so retailers pay a percentage-of-sales rent for three years, then permanently lock into the three-year average when they enter the fourth year of their lease.
We’ve seen some tenants agree to pre-pay their rent at a discount, which is a good solution if the landlord is hurting for cash flow. It also assures that the landlord won’t have to chase the tenant for rent at any point – another win-win.
As for aggressive tenant recruitment tactics, landlords can offer tenants the flexibility to cancel their leases during their term with minor termination penalties. Temporary pop-up stores are another good way for landlords to fill spaces and derive immediate income – and for tenants to test-market their products with minimal risks. Such leases can be structured for longer term options.
Robin Abrams is an X Team International partner and executive vice president of New York-based The Lansco Corporation.
Jerry Welkis is an X Team International partner and president of New York-based Welco Realty, Inc.
The Meadtown Shopping Center in Kinnelon has seen enough turnover to reflect the recession's impact on the retail industry.
STAFF PHOTOS BY AMY NEWMAN
At the Meadtown Shopping Center in Kinnelon, Petco replaced the Rag Shop. Sylvia Mastropole and her husband, Sal, are opening a hair salon, and John Park is guiding his bagel shop through the downturn. Marty's Shoes is vacant.
The departure of the Rag Shop in 2007 left a 16,100-square-foot vacancy that was followed by the loss of stores from other chains — Marty's Shoes, ice cream vendor Cold Stone Creamery, Ritz Camera's Shop Inc. and the local chain Falls View Grill. A Blimpie's sandwich store also vacated its space adjacent to the mall.
Such vacancies by national and local chains at Meadtown and other strip malls in northern New Jersey are leading to concessions by landlords and opportunities for small businesses to occupy space that has been out of their reach.
Retail vacancy rates for North and Central Jersey were 8.2 percent in August, about three percentage points higher than a year ago, though still below a national average that has been as high as 15 percent, said Chuck Lanyard, president of New Jersey's largest retail brokerage firm The Goldstein Group, quoting from his agency's most recent report.
"With that percent, landlords are taking non-traditional tenants that they normally wouldn't," said Lanyard.
Meadtown's small businesses such as Kinnelon Bagel and Kataw Jewelers, a Hallmark cards and gifts independent franchise, and other chains have survived. With new neighbors moving in, the remaining businesses are cautiously optimistic a turnaround is on the horizon.
"Business is starting to show signs of improvement," said Bob Sterenson, who owns Lynne's Hallmark Shop with his wife, Lynne. "But I don't know if things have improved or just stopped getting worse."
Things took an optimistic turn recently when pet-store chain Petco took over The Rag Shop space and the South Beach Tanning Spa LLC took the Cold Stone Creamery site in late November.
Earlier this year, Meadtown got additional traffic from new tenants in the adjoining strip mall that shares the parking lot — the Butler Bowl Plaza. The New York Sports Club and the Wayne Pharmacy and Surgical Supply moved in and a new hair salon/day spa is expected to open in February.
Negotiations are under way to fill most of the 15,000-plus square feet still vacant in Meadtown, said Jerry Welkis, president of Welco Realty Inc. in New Rochelle, N.Y., the mall's broker. "We're finalizing a deal right now for a shoe chain to take over the Marty's Shoes space," he said. "The idea is for them to open for spring of 2010."
A deal is also in the works with a restaurant to take the place of the Falls View Grill, he said, and Welkis hopes to lease all but 5,000 square feet by the late spring in the 77,000-square-foot mall. The shopping center has good visibility, customer traffic and easy access to Route 23, he said.
"This center is like a lot of other centers in New York and New Jersey," said Welkis. "It really got hit with an onslaught of major companies going into bankruptcy. It has nothing to do with the center itself."
New interest in Meadtown and Butler Bowl Plaza came recently after the owners of the 47-year-old bowling alley in the Butler shopping center gutted it in 2007 and replaced it with four storefronts and the sports club.
Sal Mastropole and his wife, Sylvia, a hairstylist, plan to open "b euphoria" a hair salon and day spa, in a 1,900-square-foot space in February as her first salon business.
"There's traffic — lots of people walking — it's accessible and off of a major highway," said Sal Mastropole. "It's a no-brainer."
That leaves 2,500 square feet still left to rent for the Butler plaza's owners.
"We're optimistic," said Jim Rohrer, president of Butler Bowl Inc., a consortium of 15 stakeholders. "We're getting a lot of phone calls for the space we have. They're looking, but they're also shopping."
The storefronts are small, said Rohrer, so the callers are doctors and physical therapists and convenience and nutrition stores attracted by the sports club.
Goldstein Group's Lanyard said dental practices, day-care businesses, hamburger franchises such as Smashburger and the health club LA Boxing are also opening in strip centers because it's more affordable now.
"There's a real entrepreneurial spirit out there,'' said Lanyard, "a window of opportunity [about 18 months] to get into great locations with landlords who will now entertain talking to [these] tenants."
In the case of Petco, Welkis said the property owner had to pay for and do the renovations — for an amount he wouldn't disclose. Pet stores are one of the few sectors that have prospered in the recession.
"We kept rent where we needed it to be and where we wanted it to be, but it cost the landlord some money to do that," Welkis said. "In other times, we wouldn't have had to."
Welkis said in general, rents are as much as 30 percent lower than they were 1 1/2 to two years ago.
The lower lease rates prompted Rich Mayer and his family, who were looking to expand their two South Beach Tanning Spa salons, to choose Meadtown. They also wanted the parking and visibility, and they believed New York Sports Club members would be into tanning.
The landlord put in a drop ceiling, removed partitions, leveled the floor and installed lights in the 1,650-square-foot space.
"It's definitely a tenants' market," said Mayer, "because price per square foot is much cheaper now than when the economy was better," about 30 percent to 50 percent less, he said.
Kinnelon Bagel owner John Park said he has yet to see business pick up from the new tenants in Meadtown, although the business has survived the vacancies and the recession.
Sales dropped as much as 40 percent from January to early April but picked up over the summer, only to fall after September. October sales were down as much as 15 percent compared with a year ago, said Park.
"It's going to take some time" to recuperate, he said.
Other businesses have seen more evidence of a turnaround. The sports club's entrance in the back of Meadtown by the movie theater has given new attention to the otherwise out-of-the-way Meadtown Barber Shop.
"That has helped," said owner Ray Mininni. "You have to have stores that bring people. We're hoping they do good."
Rochelle, NY – October 12, 2009 — Welco Realty, Inc., an X Team partner, announced today that it has leased three former Linens & Things locations. 1) A former 60,000 s.f. Linens & Things store was leased to Dick’s Sporting Goods in Paramus Towne Square, Paramus, New Jersey due to open Spring 2010. 2) A portion of the former Linens & Things in New Rochelle, New York (14,000 s.f.) was leased to Party City. 3) A division of T.J.X Companies, Home Goods, leased approximately 25,000 s.f. of the former Linens & Things space in the Nassau Park Pavilion in Princeton, New Jersey. Nassau Park Pavilion is owned and managed by Developers Diversified Realty.
About Welco Realty – Welco Realty, Inc. was formed more than 25 years ago to specialize in retail site selection for retail chains and to represent shopping center developers and landlords as their retail leasing specialists. Welco Realty’s objective is simply to provide high quality professional Real Estate Consulting / Brokerage services catered to our clients’ needs. Welco Realty works closely with its retail clients to help develop their store expansion strategy to include market analysis, site selection, demographics, competition evaluation and lease negotiations to successfully conclude all transactions. Welco works with their developer clients from ground up construction to leasing vacancies in existing centers. Welco has an aggressive marketing approach to finding the right tenant for the right property.
For more information, contact Mr. Jerry Welkis at firstname.lastname@example.org.
About X Team – X Team International is a leading retail real estate brokerage alliance serving the world’s premier tenants, landlords, developers, owners and third party service providers. Comprised of industry professionals from small and mid-sized boutique firms who average more than 20 years of experience, X Team International has proven expertise in more than 45 major markets, and partners located in some of the largest cities throughout the U.S., Canada and Europe.
– By combining passion and market-specific insight gained from years of successfully representing all facets of the retail real estate industry, X Team International partners are committed to providing superior, client-focused service and achieving the strategic goals necessary for the success of every client. Visit XTeam.net
Leveraging the extensive knowledge and years of industry experience shared by X Team International partners, the alliance specializes in tenant representation, developer/landlord representation, distressed property consulting, retailer property dispositions/workouts and retail investments. From in-depth analyses to site selection, leasing and transaction negotiations, no one is more qualified to handle your retail real estate needs and help you achieve your goals than X Team International.
Houston, TX – X Team, an international alliance of retail real estate advisors, said Tuesday that several of its partners
have received the 2008 Power Broker Award from CoStar Group.
Each year, CoStar Group acknowledges the top firms and individual dealmakers by market based on their overall transaction volume for the entire year in a variety of categories.
Two X Team partner firms were recognized as Top Leasing Firms/Lease Transactions: Jacksonville, Fla.-based Strategic Sites Clifford Commercial and New York City -based Welco Realty.
In addition, seven individuals were recognized as Top Retail Leasing Brokers/Individual Leasing Transactions: John
Cumbelich and Ben Lazzareschi of San Francisco-based John Cumbelich & Associates; Raymond Kenney of Boston-based Strategic Retail Advisors; Jerry Welkis of New York City-based Welco Realty; Steve Miller of Miami-based The Rotella Group; and Charlotte Walley and John Zikos of Dallas-based Venture Commercial Real Estate.
Elaine Misonzhnik – At a time when retail landlords are struggling with record vacancies, a novel sales strategy employed by some tenants is helping them fill the gaps and earn some additional rental income. Pop-up stores, which allow a retailer to sign a temporary lease lasting anywhere from two months to six months, have traditionally been scoffed at by mall and shopping center owners who could take their pick of permanent tenants. But in today’s environment, with retailers wary of new store openings, pop-ups are becoming a hot new trend and landlords are finding it suits them just fine.
“I am seeing more and more retailers testing out a temporary location, rather than locking into a long-term [lease],” says Jerry Welkis, partner with Welco Realty, Inc., a New Rochelle, N.Y.-based brokerage firm and member of the national X Team retail services network. “It’s a win/win kind of thing, because if a landlord has vacant space, he can get good tenants in and then get them out when he needs them out, and get some income as well.”
Earlier this year, casual apparel seller Gap Inc. secured temporary locations in Los Angeles and New York City to market its new product line, 1969 Premium Jeans. The stores will remain open through September. Luxury seller Gucci is planning to launch a traveling sneaker store in October, which will debut in New York City, move on to Miami and eventually appear in London, Berlin, Paris, Hong Kong and Tokyo, among other cities.
Meanwhile, this holiday shopping season, toy seller Toys “R” Us might open up to 70 pop-up stores on a national basis in markets previously occupied by defunct rival KB Toys, according to Welkis, whose firm worked with Toys “R” Us on two such locations in New Jersey. Footwear retailer Nine West has also been looking to do more pop-ups under its Bannister Shoes name. The chain uses the temporary locations to sell leftover merchandise. Target has used the strategy as well. For example, it opened up several temporary bodegas in New York City last year as a way of establishing a presence in Manhattan—where it currently operates stores.
Pop-up stores allow retailers to increase revenue during critical sales periods, including the back-to-school, Halloween and holiday shopping seasons, without taking on the risk of a permanent location, says Matthew Bordwin, managing director and national co-head of the real estate services team in the Melville, N.Y. office of KPMG Corporate Finance LLC, a middle-market investment bank. Down the line, if the temporary stores prove successful, they might lay the groundwork for permanent stores. Meanwhile, smaller, regional retailers might see temporary stores as a way to gain access to high-profile retail centers whose landlords would not otherwise view them as viable tenants.
There is a certain level of convenience as well, as most temporary locations don’t require any build-out work, and rental rates tend to be relatively affordable. There’s usually a fixed rental rate that encompasses common area charges and taxes and tends to be about half of what is paid by permanent tenants at the same center, plus anywhere from 4 percent to 7 percent in a percentage of sales rental fee, according to Welkis. But landlords, fearful about how an empty space in the middle of their property is going to affect shopper traffic, are more than happy with the arrangement right now.
“The landlords are open to anything, they are open to any retailer that has a concept and some money because they have empty space and empty space doesn’t pay the rent,” notes Bordwin.
In fact, as some national retailers have begun to take larger chunks of space for their temporary quarters—sneaker seller Reebok, for example, is looking for locations totaling at least 20,000 square feet—pop-ups are even helping fill up some vacancies in big boxes, says Welkis. The big-box category has been the most heavily hit by bankruptcies and liquidations this year, with the national vacancy rate hitting 7.3 percent in the first quarter, according to research from Marcus & Millichap Real Estate Services and the CoStar Group. That’s an increase of 280 basis points from 4.5 percent in the first quarter of 2008. But while pop-up shops will likely become a common sight as the retail industry heads into the holiday shopping season this fall, don’t look for the trend to hold up once real estate fundamentals return to more normal levels, says Jeff Green, president of Jeff Green Partners, a Mill Valley, Calif.-based consulting firm. For landlords, pop-ups represent a desperate measure and they will start saying no to them as soon as some permanent tenants appear on the horizon.
“This is a really unique time,” Green says. “I am not sure we’ve had such a long, deep recession [before] and one in which the consumer really put on the brakes in terms of shopping. The developers are not totally thrilled with this idea, but they realize they have to do something to increase their income. It’s not something they will want to do long-term.”
Rochelle, NY – Welco Realty, Inc., was pleased to represent Hartz Mountain Industries on the opening of the T.J.Maxx store in Secaucus, New Jersey, which was part of the redevelopment of the Mill Creek Mall. The store is 28,414 s.f. T.J.Maxx had a tremendous opening. Babies R Us superstore and Sports Authority will be following with their respective opening shortly.
Welco Realty, Inc., also has represented Hartz Mountain Industries on the leasing of the present Loew’s Theaters in Secaucus, New Jersey (43,000 sf) to LA Fitness Center. LA Fitness Center will now join other major retailers in the Harmon Meadow retail and office complex, such as Walmart, Sams, Marshall’s, Home Goods, Sports Authority, Babies R Us, Toys R Us, T.J.Maxx, A.C.Moore, PetsMart and a new 14 plex stadium seating theater will be opening in late 2009 early 2010.
For more information, contact Mr. Jerry Welkis at email@example.com.
York, NY – Welco Realty, Inc. has been retained
to exclusively represent Strike Holdings in Westchester, Long Island, the Boroughs
excluding Manhattan . Their stores are typically 32,000 sf. Welco Realty, Inc.
has just signed a lease with TJ Maxx for a 28,000 sf store in Mill Creek Mall,
Secaucus , New Jersey. Welco Realty Inc. represented the Landlord, Hartz Mountain
Industries, on the Sports Authority lease for a store of 50,000 sf in Mill Creek
Mall, Secaucus , New Jersey. Welco Realty, Inc. has been retained to exclusively
represent Babies / Toys R Us in Southern Connecticut and portions of Westchester
. Their stores are typically 65,000 – 70,000 sf.
|New York, NY
– Welco Realty has just signed two leases with P.C.
Richard & Son for a 30,000 sf store in Nanuet , New York and a 35,000 sf store
in Kearny , New Jersey. X Team partner Welco Realty, Inc., based in New Rochelle
, New York represented P.C.Richard & Son in both of these transactions. P.C. Richard
& Son is a regional Home Entertainment, Electronics and Appliance store with 49
Superstores serving the NY, NJ and metro area. P.C.Richard & Son was founded in
1909 and is recognized as the “#1 Family owned and operated Appliance / Electronics
/ Computer Retail in America ” with 4 generations of Richard Family ownership
(www.pcrichard.com). For more information about P.C.Richard & Son, contact Mr.
Jerry Welkis at firstname.lastname@example.org.
|New York, NY
– Welco Realty has just signed two leases with Babies
/ Toys R Us for a 69,000 sf store on Route 18, Summerhill Square, East Brunswick,
New Jersey and 64,000 sf in Harmon Meadow in Secaucus, New Jersey. X Team partner
Welco Realty, Inc., based in New Rochelle, New York represented the Landlord in
both of these transactions. Toys “R” Us, Inc. is one of the leading retailers
of toys and baby products with more than 1,500 freestanding destination toy and
baby specialty stores worldwide. The company sells merchandise through 586 toy
stores in the U.S. and more than 670 international toy stores, including licensed
and franchise stores, as well as through its Internet site at www.toysrus.com.
Babies "R" Us is the largest baby product specialty store chain in the world and
a leader in the juvenile industry, and sells merchandise in more than 250 stores
in the U.S. as well as on the Internet at www.babiesrus.com. For more information
about Babies / Toys R Us combination stores, contact Mr. Jerry Welkis at email@example.com.|