A Look Ahead to ICSC New York Deal-Making
As the International Council of Shopping Centers’ New York Deal-Making Conference in New York City quickly approaches, it seems appropriate to zero in on the world’s No. 1 retailing market. Chain Store Age talked with Ivan Friedman, president and CEO of New York City-based RCS Real Estate Advisors about the Dec. 5-6 conference, and the state of retail in the Big Apple and its surrounding region.
What are your thoughts on the upcoming NY ICSC show?
I think it’s going to be very robust this year. I know a lot of people who are looking forward to attending. There’s some real pent-up energy out there, making retailers eager to do deals. However, I don’t think they’ll be doing as many deals as they’d like to. For the most part, the deals that are getting done are primarily in the “A” locations, the “A” malls and high-traffic street areas. Retailers are really focused on being in the best places where they can do the most business. Right now, those are the areas with the least amount of vacancies and the highest rents.
What is the current state of retailing in the NYC area?
The hot spots today are Times Square, Soho, 34th Street, 14th Street, the Upper West Side and Madison Avenue. Retailers want to be in these areas because business is strong. But, space is very limited and rents are high on what little space is available. In fact, a recent report revealed that Fifth Avenue has the highest rents in the nation per square foot.
What is the state of retailing in the northeastern quadrant?
The major metropolitan areas are doing fairly well. Retailers have gotten good at controlling their expenses and are experiencing steady profitability. We’ve been seeing small positive comps over the last few months, so overall, things are good.
General comments/expectations for 2012?
Retailers are really paying attention to their real estate and are being proactive on fixing any underperforming locations. I think we’ll see a lot of retrenching in 2012. Retailers that are doing well and are profitable will be cautious on their expansions and will remain reserved on their optimism. For those who aren’t doing well, it’s likely they will continue to decline. I think there will be a number of out-of-court restructurings happening next year. And, retailers will remain focused on optimizing their real estate.