PDA

View Full Version : The Office Forecast: Lukewarm



Kris
January 10th, 2004, 01:31 AM
January 11, 2004

The Office Forecast: Lukewarm

By JOHN HOLUSHA

A GRADUALLY improving economy in the New York metropolitan region — albeit with little job growth — is likely to add some strength to the office leasing market this year, although rents are not expected to increase significantly, many real estate executives say.

A disconnect between soft leasing fundamentals and high prices paid for office buildings and other properties is likely to continue, thanks to an abundance of low-cost capital available to finance transactions and the attractiveness of the New York market to both local and outside investors, they add.

These lukewarm predictions come after a year in which vacancy rates increased and rents softened in most parts of Manhattan, the boroughs and suburbs. According to figures compiled by CB Richard Ellis, the brokerage and services company, the overall vacancy rate for Manhattan at the end of 2003 was 13.68 percent, compared with 12.25 percent a year earlier. The average asking rent for a mix of Class A and B buildings was $41.98 per square foot, compared with $43.56 a year previously.

Nevertheless, many market participants said they think 2003 represented a bottoming out of the business cycle and that this year should be one of recovery, although opinions vary over how robust it will be. "We have definitely reached the bottom of the market cycle," said Michael T. Cohen, the president of GVA Williams, a brokerage and management company.

The pace of leasing is expected to pick up as companies seek to lock in favorable rental rates, he said, although the arrival of two major new properties — the Time Warner Center at Columbus Circle and the full block Vornado Realty Trust development between 58th and 59th Streets and Lexington and Third Avenues that will house Bloomberg L.P. — will exert downward pressure on rents. "They will cause several large blocks of Class A space to come to the market," Mr. Cohen said, "which will keep rental rates from growing in 2004."

Although 2003 was a generally a lackluster year, it was not without its high points. One occurred when the Macklowe Organization bought what had been the General Motors Building, 767 Fifth Avenue between 58th and 59th Streets, for a record $1.4 billion, or $729 a square foot. (Another large sale, involving the 11 Madison Building at Madison Avenue and 24th Street for $675 million, was less than half as expensive at $310 a square foot.)

And, as the year was winding down, the Durst Organization reached an agreement with the Bank of America to jointly develop a new 2.1-million-square-foot building at the northwest corner of the Avenue of the Americas and 42nd Street. The 51-story building, to be known as One Bryant Park, is to be the New York headquarters for the financial services company, which will occupy at least 1 million square feet on a 20-year lease.

Demolition on the site, which is adjacent to the Durst-owned Four Times Square, the Condι Nast building, on the western end of the block, is expected to begin this spring, with occupancy in 2008.

Sales of buildings, and refinancings as owners sought to take advantage of low interest rates, continued briskly during the year, despite the softness in the leasing market that, in ordinary times, is the structure on which prices are determined.

Shaping 2003
Low Interest Rates Had Big Impact

But 2003 was not an ordinary year. Interest rates continued near historic lows and capital continued to rush into markets, like New York and Washington, that resisted the national downturn better than most other cities. The result was that the normal rules did not apply.

"The capital markets' impact was so much more pronounced than the leasing market," said Warren M. Heller, an executive managing director at Julien J. Studley, a brokerage company. "People who would not ordinarily be buyers were able to do so because of the availability of finance." An example of the availabilty of funding to underwrite real estate investment was the $1.4 purchase of the former General Motors Building by Harry Macklow, a transaction in which the Macklowe interests put up only $50 million, meaning that it was 96 percent financed, Mr. Heller said.

He added that low interest rates produced profits for buyers who because of the slow pace of leasing could not immediately increase the income of a building. If a building had an annual income of 7 percent of the purchase price — which is called the capitalization rate — and financing was available at about 4 percent, an investor could profit from the difference, said Mr. Heller, who is generally known as Woody. "When the interest rate is lower than the cap rate, there is positive leverage," he said.

Mr. Heller, who was previously with Insignia/ESG before it was taken over by CB Richard Ellis, is establishing a capital transactions group at Studley, which was previously best known as a tenants' representative in leasing transactions.

The low interest rate climate should continue through this year, at least until the presidential election, said John Lyons, the president of Granite Partners, a financial consulting company. "As a result of low interest rates, prices will remain high for stable properties with assured incomes," he said. "Capital will compete for high quality real estate through 2004."

He said that demand is strongest for buildings in the central business districts of major cities where there are barriers to new construction, which helps to ensure that existing properties will not face as much income-sapping competition. By contrast, "the suburban office sector has been out of favor for the last 36 months," he said.

With plenty of money available on favorable terms and the prospects for office leasing improving, sales boomed last year. "By last September most people were comfortable that the leasing market was picking up, and that helped drive sales," said Darcy Stacom, an executive vice president of CB Richard Ellis. "As a result sales for the year will total over $10 billion, compared to a normal year of $6 billion to $7 billion."

Part of the reason the total is higher is that prices have jumped. A few years ago the most prestigious buildings in New York sold for about $400 a square foot, Mr. Heller said. Recently, they have been closer to $600 a square foot.

Since there are two sides to each transaction, what is good news for sellers can be bad news for prospective buyers. "We are increasingly perplexed on the buy side," said Anthony E. Malkin, the president of W&M Properties, which manages a privately owned real estate portfolio. "It is very hard to find anything that makes sense."

Because the sale of real estate that has appreciated in value usually triggers a tax bite, many landlords opted to recapitalize their properties, rather then sell them outright, Ms. Stacom said. She said investors with short-term financial objectives were able to cash out because of the availability of capital. "The opportunity funds got out, but the operators stayed," she said.

"The money that wanted to get out," said Steven A. Kohn, the president of Sonnenblick-Goldman, a financing company, "was short-term money that was invested a few years ago. In some cases the returns have not been what investors wanted, and in others the operating partner and the capital partner have different objectives."

A higher stock market, and the recovery in the financial services business that many are counting on to revive the office leasing business, may also provide more capital to finance real estate transactions, Mr. Kohn said. As their stocks increase in value, pension funds may increase their allocation of funds to real estate, to keep it a fixed portion of their portfolios, he said.

Leasing
Tenants Lock In Longer Terms

On the leasing side, the Durst deal with Bank of America may mark a turning point, said Peter G. Riguardi, president of the New York region for Jones Lang LaSalle, a brokerage company. "This is the transaction that people will point to as the turnaround," he said. "It is just as the Morgan Stanley building at 1585 Broadway got things started again after the last downturn."

He said the commitment by the financial services company in the early 1990's took an empty building off the market and encouraged other companies in the industry to establish themselves in Midtown. He said the Bank of America deal would similarly encourage other participants in New York's most important industry to make commitments in the city.

As the economy improves, the amount of shadow space — space that is unoccupied but not officially on the market — will decrease as companies reserve it for their own needs, Mr. Riguardi said. "By the end of this year the shadow space will have disappeared," he said, "and it will be a tighter market by the fourth quarter."

Interest in leasing space increased toward the end of 2003 and appears likely to continue into at least the early part of 2004, said Mark S. Weiss, an executive vice president of Newmark & Company Real Estate, a brokerage and management company. "There is a lot of activity, but it is hard to know if it is a pickup in the economy or the result of pent-up demand," he said. "So many companies put their plans on hold, and then they came rushing back."

He said the Bank of America deal was important because of the signal it sent to other companies wondering whether to make commitments for space. "When the big companies act, the smaller companies will follow," he said.

The sense that rents are as low as they are likely to become and that deals in the future will be more expensive is pushing some tenants to lock in for longer terms than usual, said Mary Ann Tighe, the chief executive for the tristate region of CB Richard Ellis.

"There is a different attitude on the part of tenants," Ms. Tighe said. "They have the feeling that we are at the bottom, and they don't want to miss it. And they are locking in for 15 or 20 years now, rather than three or five years."

Many of the transactions are by companies renewing leases for space they already occupy, Ms. Tighe said. "Six of the top 10 deals are renewals," she said. They include New York Presbyterian Hospital, which renewed 210,702 square feet at 333 East 38th Street; the law firm of Dewey Ballantine, which renewed its lease and expanded to 493,000 square feet at 1301 Avenue of the Americas; and Estιe Lauder, which renewed its 309,139 square feet in the former General Motors Building at 767 Fifth Avenue.

As companies renew leases or sign new ones, the vacancy rate will decline and rents will rise, slowly at first, but then perhaps sharply, she said. In terms of vacancy rates, "this has already happened in Midtown South and will happen in Midtown as well," she said. Although asking rents in Midtown South have not risen, Ms. Tighe said that asking rents tend to trail market changes. Taking rents in Midtown South, she said, are a much larger percentage of the asking rent than in areas of softer demand like Downtown.

The outlook, Ms. Tighe said, is for a slow rise in Midtown rents through this year and then a sharp rent spike in 2005.

Midtown may be the focus of much of the real estate industry's attention, but the bargains for tenants are to be found downtown, said Bruce Mosler, the president for United States operations at Cushman & Wakefield, a major brokerage and services company. Not only are rentals lower in the area, but there are government incentives available to help businesses recover from the attack of Sept. 11. "Incentives of $10 to $12 a square foot can make a big difference," he said.

With the incentives and lower asking prices, brokers estimate that space downtown is $20 to $30 a square foot cheaper than in Midtown.

Like other real estate executives, Mr. Mosler said an increase in employment is needed to induce companies to lease the space to house their staffs. Although there was little job growth last year, he said he expected to see a significant increase this year in part because of improvements in the stock market.

"The N.Y.S.E. and Nasdaq are up, and in New York it is Wall Street and financial services that will lead the way in space absorption," he said. He noted that the amount of sublease space had declined from 35 percent of the total available to 26 percent by the end of 2003.

Proposed developments on the far West Side of Manhattan and in Long Island City will almost certainly be delayed until vacant space is absorbed closer to the city's core, real estate executives said.

Following are developments in other sectors of the commercial property industry:

Other Office Markets
A Leasing Slowdown in the Suburbs

The pace of office leasing in northern New Jersey, one of the largest markets in the country, was slow last year, and with retrenchments continuing in the state's largest industries, no quick pickup is anticipated.

"There has not been a lot happening," said Robert J. Donnelly, an executive vice president of Cushman & Wakefield of New Jersey. "We are 40 percent off the average of the last five years."

He noted that the leading industries in the state are telecommunications, pharmaceuticals and finance. Telecommunications has been downsizing, pharmaceuticals have been consolidating and finance has been waiting for markets to improve. He said the Interstate 78 corridor through the midsection of the state has a 40 percent vacancy rate.

Sales of office buildings have been stronger than leasing. Mitchell E. Hersh, the chief executive of Mack-Cali Realty, took advantage of the hot investment sales market to sell one of its waterfront buildings in Jersey City, Harborside Plaza 10, to Istar Financial, a New York company, for $194 million. "That is the highest price ever paid for an office building in New Jersey," he said.

Mack-Cali, a real estate investment trust, had a more difficult time on the leasing side, Mr. Hersh said, with sublease and shadow space reducing demand for directly leased space. But he said that "there is more optimism in corporate America" and that some sublease space had been withdrawn from the market by companies for their own use.

Mr. Donnelly said the amount of space leased in New Jersey fell to about 8.5 million square feet in 2003 after averaging 13 million to 14 million square feet annually in the previous five years. He said this year should be better, but is uncertain by how much. "We will probably be above 8 but not back to 13 to 14," he said.

Leasing was similarly slow in Westchester County and Fairfield County, according to James Fagan, a senior vice president of Cushman & Wakefield. He said that the market was in a malaise at the beginning of last year but that it began to improve after companies shifted their focus from cutting costs to meeting growth targets.

"By the end of the year, activity began to pick up, and we saw leases in the 5,000 square foot to 15,000 square foot range," he said.

The vacancy rate in Westchester stayed flat at a little over 14 percent through the third quarter on a year-to-year basis. Average asking rents declined about $1 a square foot, to $24.34, according to figures published by Newmark.

The vacancy rate in Fairfield County, Conn., was also flat year-to-year, at about 18 percent. The asking rent declined to $29.27 a square foot from $32.06 a square foot in the third quarter of 2002.

Retail
Steady Rents for Store Space

New Yorkers kept on shopping last year, so rents for retail space held steady, in contrast to the softness in the office sector.

Some retail brokers said the strength in the sector was a response to the threat of terrorism and the difficulties in traveling. "Many people are afraid to travel, so they stayed home and shopped," said Faith H. Consolo, vice chairman of Garrick Aug Associates, a brokerage company specializing in retail space.

Ms. Consolo said fashion accessories like handbags had been hot sellers in the past year, as were electronics, notably plasma televisions.

The decision by Westfield America to accept a $140 million buyout of its lease for the retail space at the World Trade Center has clarified the situation downtown, according to Richard B. Hodos, president of Madison HGCD, a retail brokerage company.

"Many retailers were waiting to see what Westfield would do," he said. "Now Borders Books is on Broadway, and others are looking there as well."

Big box stores have been entering the market despite the difficulty of finding suitable spaces in Manhattan, said Robert K. Futterman, chief executive of RKF Associates, a retail brokerage firm. "We are looking for spaces of 40,000 square feet and up," he said. He noted that Home Depot had leased space on 23rd Street and in the Vornado development in the old Alexander's site on Lexington Avenue and 58th Street.

He added that Whole Foods had secured sites near Union Square and in the Time Warner development at Columbus Circle and said it was possible that the discount retailers Target and Wal-Mart might enter the Manhattan market.

Hotels
Upturn Is Expected to Continue

In the hotel industry, which rents its space by the night rather than the year, the situation was similar to that of the office industry: its asset values held up much better than its operating earnings, according to Sean Hennessey, the leader of the New York hospitality practice of PricewaterhouseCoopers, the accounting and consulting firm.

"The first half of the year was tough in terms of both occupancy and room rates," he said. Occupancy in the first quarter averaged 65.7 percent compared with 70.1 percent a year earlier, according to figures compiled by the firm. The average nightly rate was $168.93 compared with $177.21.

By the third quarter things had improved, with the occupancy rate up to 78.5 percent, compared with 74.1 percent. The average daily rate, however, had declined slightly to $168, from $172.60 a year earlier.

By the last four months of the year, Mr. Hennessey said, occupancy had improved and room rates had pulled equal to those of the previous year. "The real engine of the hotel business in New York is corporate travel and that is making a slow comeback," he said.

The 251-room Mandarin Oriental Hotel, which opened in November as part of the Time Warner complex in Columbus Circle, was the largest of six hotels that opened last year. The 187-room Hotel Gansevoort at Ninth Avenue and 13th Street is the biggest that is expected to open this year, according to the firm.

With traffic expected to improve somewhat this year, Mr. Hennessey said, hotel operators are hoping to increase their room rates by 4 to 7 percent over the course of the year.

Copyright 2004 The New York Times Company

Kris
March 6th, 2004, 10:39 PM
March 7, 2004

COMMERCIAL PROPERTY | MANHATTAN OFFICES

Small Spaces Make Up Growing Share of Leases

By JOHN HOLUSHA

http://graphics7.nytimes.com/images/2004/03/07/realestate/comprop.184.2.jpg
Prebuilt space available for lease on the 37th floor of Carnegie Hall Tower on 57th Street.

WHEN W. Stephen Keller came to New York in 2000, he established a temporary outpost for the Stonehenge Capital Corporation, a Baton Rouge-based private investment fund, and soon went looking for a more permanent location.

In 2002, he signed a lease for 3,200 square feet of space on the 20th floor of Carnegie Hall Tower, a slender 60-story-high building on 57th Street between the Avenue of the Americas and Seventh Avenue.

Today, at a time when many large space tenants are reluctant to make commitments because of the uncertain economic outlook, small spaces are being leased to firms, like Mr. Keller's, that feel they need a presence in New York or are seeking to move from less convenient locations or older space.

According to a survey by Newmark & Company Real Estate, a brokerage and management company, the percentage of lease signings for spaces of less than 5,000 square feet has been rising in the past few years — a time of sluggish demand in the overall office market. Leases for less than 5,000 square feet, which accounted for 39 percent of total transactions in 2001, rose to 52 percent last year. If the calculation is based on spaces under 10,000 square feet, the total increases to 76 percent from 59 percent over the same period of time.

Although it is the big deals, those covering multiple floors and hundreds of thousands of square feet, that grab the industry's attention, it is the smaller leases that are its real lifeblood. According to Newmark, 78 percent of the office space users in Manhattan require less than 2,250 square feet. Only 9.2 percent of businesses occupy more than 12,000 square feet, the report added.

The demand for small spaces is at least partly a result of layoffs that have occurred in the financial industry, according to William G. Cohen, an executive vice president of Newmark and the principal author of the report. "Many former senior managers have reconstructed their careers by starting their own funds or boutique businesses," he said, which typically set up shop in well-located but modestly sized space.

Law firms, he added, are typically busier in economic downturns and have been involved in many smaller deals. And companies in many industries have been unwilling to commit long term to more space than they need at the moment and have opted for small amounts of expansion space on short-term leases or subleases.

Mr. Keller said finding a permanent location had been more difficult than he expected, even with much vacant space available. "We were looking for 3,000 to 4,000 square feet," he said. "Most of that kind of space is on the East Side, which is not convenient to our people, who either live on the West Side or commute to Penn Station."

On the West Side, much of the available space was in the Times Square area, which he termed undesirable for his business. He said the layout on the 20th floor of Carnegie Hall Tower was so efficient that 3,200 square feet comfortably houses offices for six professionals and additional space for support staff. "Elsewhere, we probably would have had to rent 4,000 square feet and had a lot of dead space," he said.

Brokers said rents in the building range from the low $40's a square foot for lower floors to as much as $80 a square foot for the higher floors, which have a view of Central Park. At that the rent is off somewhat from the $89 a square foot that Bill Clinton initially agreed to pay for a post-presidential office on the 56th floor. After criticism of the cost, Mr. Clinton took much less expensive space in a building on 125th Street.

One reason the interior space was efficiently designed for Mr. Keller's purposes is that it had been prebuilt by the building's owner, the Rockrose Development Corporation, to take best advantage of the approximately 10,000-square-foot floors. In prebuilt space, all the walls, doors, carpets, lighting and utilities are in place, meaning all tenants have to do is move in their furniture.

This is in contrast to the typical practice, in which vacated office space is demolished back to the basic structure of the building. Prospective tenants typically have to figure out to use the raw space — or pay someone to do it for them — and then negotiate with the landlord about how the construction costs will be shared and how much free rent there will be while the work is under way.

Prebuilding is speculative construction because the landlord must absorb the cost — typically $40 to $60 a square foot, according to brokers — before there is a signed lease. But prebuilt spaces can be spruced up with paint and new carpeting and re-leased at minimum expense, brokers say.

Prebuilt space is attractive to small users, because they are typically small businesses with little time or inclination for the detail of design and construction, said David L. Hoffman Jr., an executive managing director of Colliers ABR, a brokerage and services company.

"It's a psychological thing," he said. "The small tenant has no time, and it's the c.e.o. who is out looking. Space that is already constructed is appealing, because they know how it is going to look."

PREBUILT space can be occupied almost immediately after signing the lease, and it simplifies lease negotiations, Mr. Hoffman said. "Most small tenants are fearful of big, bad landlords and they have a point," he said. "Landlords in New York are well experienced at maximizing the value of their assets at the expense of tenants." Prebuilding eliminates some points of contention, he said.

Prebuilding also removes another obstacle, the short-term outlook of tenants versus the long-term expectations of landlords, Mr. Hoffman said. "Many of these guys have dreams of grandeur; they expect to be 50 percent bigger in a few years and don't want to sign long-term leases," he said.

Indeed, if a 3,000-square-foot tenant gets a new account, he often needs to expand by 50 percent to house the people handling the new work, said Matthew T. Leon, a managing director of Newmark. "The 10,000-square-foot tenant does not," he added.

But if a landlord invests $50 or more a square foot on a tenant's build-out, he expects to amortize that cost over a 10-year lease. Prebuilt space — because it is not specific to a particular tenants — can easily be reused, Mr. Hoffman said. "I have dealt with second and third generation prebuilds, and they spruce up well," he said.

Because of the varying needs of small tenants, Mr. Leon said, spaces on prebuilt floors are designed so the corridors of spaces line up, so if a tenant needs to grow, removing a wall or two adds space. Since most of the walls in modern office buildings are not load bearing, making adjustments is relatively simple.

Brokers say that because there are only a few ways to lay out offices in spaces under 5,000 square feet, they almost always come in standard sizes. "They are the equivalent of studio, one-bedroom and two-bedroom apartments," Mr. Cohen said.

The layout usually includes executive offices with windows along the outside walls, with space for clerical and support workers in the interior. A reception area is just inside the front door and a conference room is adjacent to it. Pantries with a refrigerator and a microwave are popular amenities.

Little things count big in small spaces, Mr. Hoffman said. "Tenants get juiced at the sight of a pantry and a sink," he said. "Investing $1,000 a unit to add a microwave and a refrigerator is a lot better than having space stand empty."

http://graphics7.nytimes.com/images/2004/03/07/realestate/comp.184.1.jpg

Copyright 2004 The New York Times Company

Pottebaum
March 7th, 2004, 12:52 PM
He added that Whole Foods had secured sites near Union Square and in the Time Warner development at Columbus Circle and said it was possible that the discount retailers Target and Wal-Mart might enter the Manhattan market.

I'm really hoping that Wal-Mart stays out of Manhattan.

Gulcrapek
March 7th, 2004, 02:24 PM
Out of the city in general...

normaldude
March 7th, 2004, 03:44 PM
I'm really hoping that Wal-Mart stays out of Manhattan.

I hope Wal-mart opens up in NYC, but not Manhattan. A 24 hour Wal-mart in Brooklyn or Queens would be good. Low prices, 24 hrs/day.

Wal-mart is already pretty much in NYC. The Valley Stream Wal-mart store is literally a few hundred yards from the border of Queens. The talk is that Wal-mart will be in NYC within 18 months.

http://www.nydailynews.com/business/story/158546p-139148c.html

Gulcrapek
March 7th, 2004, 04:01 PM
Why in Brooklyn and Queens? It would do just what it does everywhere else in the nation: open a huge parking lot and drive everyone else out of business.

NoyokA
March 7th, 2004, 04:04 PM
I think NYC could easily handle a million Wal Marts, I dont see what the big deal is? Can some one please provide me an argument with backing as to why it is detremental? If Wal Mart is a threat anywhere's its in small towns.

Gulcrapek
March 7th, 2004, 04:06 PM
It takes up a huge amount of space.

It drives nearby specialty stores out of business.

It becomes the tacky centerpiece of whatever neighborhood it's in.

NoyokA
March 7th, 2004, 04:42 PM
K-Mart hasnt hurt NYC, a similar, better, store, wont either. Besides NYC being the fully capitalistic city it is will only benefit from a growing diversity in retail.

Gulcrapek
March 7th, 2004, 04:44 PM
I'd be fine with their arrival if it was urbanized to fit its surroundings and not as huge as it usually is.

normaldude
March 7th, 2004, 04:57 PM
Why in Brooklyn and Queens? It would do just what it does everywhere else in the nation: open a huge parking lot and drive everyone else out of business.

Wal-mart doesn't "drive everyone else out of business". Wal-mart does crush less efficient general retailers like Woolworth, Caldor and Bradlees. But more efficient retailers like Target, Home Depot, Lowe's, Best Buy, Circuity City do just fine.

All over the country, you'll see those retailers thriving right along side Wal-mart. In Linden NJ, just a few miles outside NYC, you'll see Wal-mart, Target, Home Depot and Staples all next to each other. That type of situation occurs all over the place.

And Wal-mart isn't going to hurt the speciality retailers much. It's not like Gucci and Prada stores on 5th Avenue are going to suffer from a Wal-mart in Brooklyn or Queens. It's not like the Apple store in Soho or the shops at the Time Warner Center are going to get hurt by Wal-mart. Kmart might get hurt though. They're always in and out of banktuptcy, and generally do poorly head-to-head against Wal-mart.

As for a "huge parking lot", it seems like Wal-mart is going with a new, much smaller store format for urban markets (see my above article). Besides, NYC already has big box retailers with parking lots.. from Home Depots and Targets in Brooklyn & Queens, to upcoming Lowe's and Ikea in Red Hook, Brooklyn.

There's a few reasons I'd rather see Wal-mart in Brooklyn or Queens, and not Manhattan.
1) Brooklyn and Queens have the highways to support a Wal-mart.
2) Brooklyn and Queens have the space for a parking lot. Like the Home Depots in Brooklyn and Queens.
3) Land is cheaper in Brooklyn and Queens, which would be important for a low cost price leader like Wal-mart.
4) Wal-mart is boring, and something all American tourists have seen back at home. So I'd rather tourists in Manhattan see NYC unique establishments rather than Wal-mart. A Wal-mart in Brooklyn or Queens would be frequented primarily by NYCers, since tourists spend most of their time on Manhattan destinations.

Lastly, I love anything that's open 24 hours. That's one of the great things about NYC; it's the city that never sleeps. And 24 hour Wal-marts are fantastic in that respect. If Wal-mart opened a 24 hour store in NYC, one could do all their shopping at 3am, with no crowds, and the same low prices.

Gulcrapek
March 7th, 2004, 05:53 PM
#2: Space for a parking lot, but that defeats the point- parking lots are bad.
#4: basically "I don't want it, it's ugly, so I'm pushing it over to you". How kind.
#5: there are plenty of other places open 24/7, like various pharmacy/drug store brands, and some popular stores. And then there are the stores which are open from around 6am-1am, which leaves 5 hours out that barely anybody touches anyway.

You seem to be ignoring the specialty stores in Brooklyn. We do have them, you know. They're not orbitally expensive, but why does price matter with a specialty store? Plenty of people own their own businesses, which would be shut down if Wal-Mart came.

And as for the existing big box retailers with big parking lots (Lowe's, Home Depot, Target, Circuit City), the last three of those came just a year and a half again in what I consider one of the worst, most suburban development in Brooklyn in as long as I can remember. It's anti-urban and has no place. Lowe's is also new, and uninvited from me. However, there are several smaller Home Depots around - and they're fine, because they're relatively small and fit into existing dense areas.

normaldude
March 7th, 2004, 06:23 PM
However, there are several smaller Home Depots around - and they're fine, because they're relatively small and fit into existing dense areas.

Well, as mentioned in the article I posted..
http://www.nydailynews.com/business/story/158546p-139148c.html

..Wal-mart recently unveiled a much smaller "urban format" store, which is likely what they would use in the NYC market.

Something like Ikea in Red Hook/Brooklyn ( http://ikearedhook.com ) is going to be a much bigger "monstrosity" in terms of car traffic and space. A lot of the stuff people buy from Wal-mart is portable.. socks, DVDs, toothpaste, etc, so the mass-transit-centric NYC population won't have to rent trucks to shop there. They'll just take subway/bus. Places like Ikea and Home Depot and Lowe's sell very large items like lumber and furniture, and are more truck/car and parking lot oriented.

Either way, Wal-mart shouldn't be "forced" on any community. If Brooklyn residents don't want Wal-mart, then Wal-mart will go elsewhere. Maybe the Elmhurst / Rego Park section of Queens along Queens Blvd, where they already have a cluster of big box retailers like Target, Best Buy, PC Richard, Sears, Circuit City, CompUSA bunched up together.. as well as the expanding Queens Center Mall ( http://forums.wirednewyork.com/viewtopic.php?t=2558 ).

normaldude
March 7th, 2004, 06:30 PM
You seem to be ignoring the specialty stores in Brooklyn. We do have them, you know. They're not orbitally expensive, but why does price matter with a specialty store? Plenty of people own their own businesses, which would be shut down if Wal-Mart came.

NYC already has plenty of Kmarts and Targets. So if you wedged a small, urban-format Wal-mart into the cluster of big box retailers that already exist in Elmhurst / Rego Park along Queens Blvd (Target, Best Buy, PC Richard, Sears, Circuit City, CompUSA, plus Queens Center Mall), I don't think specialty retailers in Brooklyn would really be harmed. If a place is selling antique lamps or vinyl records for DJs, it's not competing directly with Wal-mart.

Again, I think the main loser will be Kmart. As Wal-mart opens stores in NYC, Kmart may get hurt and/or pushed out.

Gulcrapek
March 7th, 2004, 06:31 PM
That prototype doesn't look too urban to me. Cutting back from the tire/lube section is great, but I think it needs more work. I hope the thing is also flexble in terms of where it'll be like the Home Depots are (except the ones in CI and Gateway).


If Brooklyn residents don't want Wal-mart, then Wal-mart will go elsewhere.

I hope so.

normaldude
March 7th, 2004, 06:36 PM
That prototype doesn't look too urban to me. Cutting back from the tire/lube section is great, but I think it needs more work.

Wal-mart does have a 2-story format store in Massapequa NY, which is attached to an indoor shopping mall. I think Wal-mart also has some 3-story format stores in California and maybe S.Korea.

Those are other possibilities in reducing their footprint.

Gulcrapek
March 7th, 2004, 06:40 PM
Then let them take them if they propose it here! :P

NoyokA
March 7th, 2004, 06:55 PM
At an Arkansas press conference Wal Mart released its Manhattan prototype store today. The showcase Madison Avenue store will feature a parking lot, a McDonalds, and an authentic red neck woman.

http://timebomb.pair.com/pictures/walmart.jpg

TLOZ Link5
March 7th, 2004, 07:44 PM
Tee hee.

Pottebaum
March 7th, 2004, 07:55 PM
What sort of opposition do you think there would be if Wal Mart announced plans to build in NYC?

---------------
If a Wal Mart did open in the City, I know it wouldnt hurt clothing stores [The clothes at Wal Mart are utter crap] But everything else is sort of up for grabs.

Do you think a Walmart in Manhattan or downtown Brooklyn would have parking lots? I was thinking more along the lines of a parking garage.

Pottebaum
March 7th, 2004, 09:45 PM
http://www.newsday.com/business/printedition/ny-bzxtra093662641feb09,0,7110199.story?coll=ny-business-print

If a Walmart was built in Manhattan or Brooklyn, do you think it would be put in a pre-existing building, or do you think space would be cleared off for it and a parking lot would be added?

Gulcrapek
March 7th, 2004, 10:11 PM
It depends on where exactly it would be built.

TLOZ Link5
March 7th, 2004, 11:52 PM
The Kmart at 770 Broadway on Astor Place occupies the first two floors and basement of a former department store, with the rest of the space leased as offices.