This week's guest: Jeffery Roseman, Newmark

0:00 Speaker 1 Good morning. This is Michael Stoler for the Stolen real Estates report on the Cats Roundtable this morning. I have the King of retail leasing, somebody I’ve known for many years who’s been very helpful to me in helping me find guests from my TV shows and just for market information.

0:15 Jeff Roseman, a founding partner of the Newmark’s retail division and a vice chairman correct of the firm Newmarketing Company. So, Jeff, we were talking the other day and I was a little surprised from your comments that you said retail is in favor. It’s a favored asset today. I still remember when they said retail walk away from it, Banks, no lending,

0:37 nothing over there. What happened.

0:40 Speaker 2 It’s interesting, Michael, It’s been a crazy ride. You know, probably about ten years ago they were predicting the demise of all retail. Online sales were going to destroy retail. You had a lot of old chains that were sort of getting on in years that were loose using customers, and so it was a perfect storm that people were

1:04 sort of welcoming in the the you know, internet as a way to shop. I think as time evolved and people started shopping online, seriously. You know, you realize that while it’s good for paper towels and sneakers, that you know, you know, you’re not buying suits and clothing and jewelry and furniture, and you know, it’s it’s pretty much a

1:32 wild card.

1:32 Speaker 1 When you’re doing that.

1:33 Speaker 2 So retailers, you know, geared up a bit. The pandemic sort of bloomed a whole new group of people who wanted to build a better mouse trap, who said, I could sell eyeglasses better, I could sell croissants better, I could do you know, teeth whitening better, and and you know, lo and behold. It’s it’s just been incredibly.

2:00 Speaker 1 With regard to that. You know, when you talk about the glasses, the eyeglasses. Rb Palker is a perfect example. They were an internet company and today they’re a major retailer. Correct.

2:11 Speaker 2 You know, Amazon is a retailer, and I think I think all of the online retailers realized quickly that they needed another channel, and people really wanted to go in and bond with with the brand and be able to you know, know know what they were getting into. So yeah, it’s there are no strict online retailers anymore. Everyone’s got combination.

2:38 Speaker 1 Now, what with regard to the retailers, Let’s talk about the landlords. How’s the world changed for a tenant because I knew before that you could get a great deal, a couple of months free, a couple of years free, you know, and other improvements. What’s what’s the status today for attendant?

2:55 Speaker 2 Well, you know, if we talk New York City.

2:57 Speaker 1 And we’re talking New York City, let’s boroughs, right.

3:01 Speaker 2 So so look, COVID was was a disaster for everybody, obviously. So I think there were some retailers and restaurant tours that that saw COVID for what it was and knew that it was going to end and were able to sort of make some incredible deals. Were there were great deals being done by the landlords who could afford to

3:23 do them. You know, a lot of landlords who purchased properties in the past few years, they had to give back the keys when their tenants left the the you know, established landlords were able to make deals with retailers, giving them a couple of years free rent, ti do whatever they had to do to get a live retailer in there.

3:41 Speaker 1 That’s gone away.

3:42 Speaker 2 I mean, the markets have all come back, you know, the the lagging markets have been Midtown and downtown from a retail standpoint. But but over the past year, I’d say those markets have come back as people come back to the office. But you know, there’s not a market in the city right now or from a retail standpoint,

4:05 that is not flourishing.

4:07 Speaker 1 Now you were talking to me. Also with regard to restaurants, what’s happening in the restaurant world.

4:14 Speaker 2 There’s there’s a lot of restaurants, you know. I think as a way to get people back to the office. A lot of landlords have have welcomed restaurants in and are converting old retail spaces or bank spaces into restaurants.

4:31 They are they are paying up for the right brands. I mean sl Green is a prime example of someone who has made a lot of deals with restaurants over the past year or so. They realize it is a it’s an amenity, it does bring people back to the office and and it it just is a feel good

4:50 use on the ground floor as opposed to maybe a bank or a you know, some other bland retailer.

4:58 Speaker 1 Okay, with regard to Midtown, let’s talk about Fifth Avenue, Madison Avenue.

5:05 Speaker 2 Madison has come back. The past two years have been a number of deals that have been done. The rents are approaching you know, thousand dollars a foot range, which is very strong. I mean, you know, again a bunch of years ago, during the pandemic, they probably dropped down to five six hundred dollars. Previous to that, they were

5:30 you know, fifteen hundred to two thousand, which was probably a little bit too high. It probably wasn’t worth it. But right now Madison is a is a very desired street.

5:41 Speaker 1 And where’s it ending seventy second Street.

5:44 Speaker 2 Well, there’s different pockets. You know, you have your luxury south of seventy second and then then there’s a sort of from seventy second to eighty sixth Street there’s it’s almost two pockets. You know. One is a you know, from from seventy ninth to eighty sixth Street is a residential area, high end residential area.

6:02 You’ve got, you know, a tremendous demand of you know, the women’s apparel stores and the ath leisure stores and high end bakeries, et cetera. So the whole street is what.

6:13 Speaker 1 About the proliferation of the gyms, what’s the status on the health clubs.

6:18 Speaker 2 The health clubs are doing okay. You know, there’s a couple of new new brands in the city. Lifetime Fitness has has taken a big bite out of the city. They’ve opened a number of stores. There are terrific operation.

6:34 And you know, you’re still seeing some of the smaller fitness whether it’s the pilates or the yogas, and you know, and there’s there’s been a shakeout. There have been some that have you know, gone away and again COVID. COVID really hurt a lot of those companies because people certainly weren’t going into, you know, a small room to sweat

6:58 with forty people.

7:01 Speaker 1 How is the Hudson Yards area and the Brickfield West area on the far west side doing in retail, you know, phenomenal.

7:09 Speaker 2 I mean I think that you know, what Ornado has done with both Penn Station and Moynihan Station is or game changer. I mean Moynihan Station. Anytime I’m showing a retailer around that part of town, I walk them through both Penn and moynihand just so they get a feel for sort of you know, the transportation hub that takes

7:32 you to this part of town. Manhattan West has done a great job. The Whole Foods is always packed. There’s a number of restaurants in there. It feels good. Those office buildings seem to be filled most of you know, if not five days a week, four and a half days a week. There’s a real sense of energy, right.

7:55 Speaker 1 And then there’s also the fact that Wells Fargo took over the name and Marcus Space.

8:00 Speaker 2 Which is great. I mean, that’s one of the highlights for us because it brings more people to the area. You know, we were hoping that they didn’t put another department store in there, because that’s probably not what the area needed. There’s enough retail there now Hutson Yards, there’s a lot of retailers. Now you have three thousand or

8:19 four thousand people every day sort of eating and shopping in the area.

8:23 Speaker 1 Okay, with regard to that, what’s your thoughts about the Macy’s on thirty fourth Street today?

8:28 Speaker 2 Thirty fourth Street is still in a great street. Obviously, there’s a lot of talk about what’s going to happen to it. I’d be shocked if it ever goes away. I would also be shocked if one day it’s not an office building on top of it.

8:43 Speaker 1 But we’re a residential tower or residential tower, right.

8:48 Speaker 2 But that market is still strong, you know, thirty fourth Street and that whole Penn Station areas is still very in demand.

8:56 Speaker 1 Retail in Lower Manhattan specific the oculus in the other areas over there.

9:03 Speaker 2 I mean, the oculust has struggled a bit. I think they shot high, very high end, and there’s some you know, flaws in sort of the traffic flows of it. But you know, we did a deal down at twenty eight Liberty with a movie theater chain, Alamo, that opened up ten screens down there. They’re doing phenomenal. You know, Downtown

9:26 has a great mix of residential, in office and tourists. So it’s you know, the businesses there. Broadway has filled up.

9:37 Speaker 1 Speaking of that, Times Square, what about.

9:41 Speaker 2 Times Square is back to where it was, I mean the the the tourist numbers, I thought, I yeah, I mean it’s probably higher than it was pre pandemic. I you know, for me, it’s a tip off when I start getting calls from all the souvenir retailers. They’re all looking to come back into New York City again and

10:01 open stores. There’s a lot of tourists on the street. Times Square is great. I think it needs a little bit more retail. It’s got a lot of food, a lot of restaurants, a lot of entertainment, and a little short on apparel.

10:15 Speaker 1 Ask question the Burrows. How’s retail doing in the boroughs. The Burrows are strong.

10:19 Speaker 2 The Burrows, like the Upper East and Upper West Side, benefited a bit from COVID because people were home more so, retailers wanted to be closer to where people were living. So the national food chains that never really wanted a veer from midtown or downtown started going into some of these more residential areas. So you know Queen’s Forest Hills

10:42 and Astoria, and you know Brooklyn Heights and Park Slope. They all benefited from from people being at home. Staten Island.

10:51 Speaker 2 Staten Island I think is getting better. It’s had some ups and downs. You know, the Empire Outlets was taken over finally by by a new buyer and it’s a It’s a wonderful property and I think in the right hands will will be a win.

11:10 Speaker 1 Okay, I think people should go in the right hands of Jeff Roseman and his colleagues at Newmark and company, and thank you for being here. Thank you next week. Appreciate it.