Case Study

E walk Times Square

Target, Five Below, and the newly re-configured Regal E-Walk Stadium at our Times Square asset, E-Walk Retail


In 2016, we started to think about a future strategy for our Times Square asset, E Walk Retail. We developed and opened the site in 1999 as part of the revitalization of 42nd Street, one of the largest urban renewal projects in the United States. As crime dropped in the 1990s and 2000s, tourism boomed and experiential retail thrived. Twenty years later, we had an opportunity to reposition the asset once again to reflect changes in the city and the consumer.

With a number of leases rolling off, we had a rare opportunity to rethink the tenant mix and the way the space was used. As development in the city has moved west, the location has become an artery for everyday New Yorkers, not just tourists, as it sits on top of subway and bus lines that move 130 million commuters a day. Large scale projects like Hudson Yards, the future redevelopment of Penn Station and the Port Authority Bus Terminal are likely to keep the gravitational shift of growth westward.

At the same time, retail has changed. E-commerce has reset consumer expectations for convenience, and fierce competition has produced category killers with an emphasis on scale discounting. National big box retailers, which before the Internet were the biggest threat to urban retail, are now welcomed as anchors. By using smaller, more flexible formats in transit corridors, the stores have opened new markets by providing user-friendly retail for urban shoppers. By incorporating these locations into an omni-channel e-commerce strategy, the sites provide a necessary beachhead into major markets around the country, bringing a competitive advantage against single channel retail.

Target, Five Below, and the newly re-configured Regal E-Walk Stadium at our Times Square asset, E-Walk Retail

After considering these factors, we decided to focus on convenient, necessity-based retail to attract a new type of consumer to the asset. We envisioned an urban power center in the heart of Manhattan anchored by two smaller book-end small footprint, “big box” pads and Regal Cinema’s US flagship location. Unlike a suburban power center, we had less wiggle room in terms of space. But with some creativity, we could generate additional traffic and enhance the value of the in-line space.

Our first goal was to try to reconfigure and re-capture underutilized space. During our lease negotiations with Regal, we realized changes in their business had created opportunities to reset their footprint. With ticket sales shifting to mobile, some of the lobby space had become obsolete. We also learned they needed fewer theater spaces with a greater focus on premium experience seating. When they signed their new lease in 2017 for 72,000 sq feet, we were able to take back excess lobby and theater space, helping create room for new ground floor tenants and a book-end anchor pad - a win-win scenario for both parties.

To finish freeing up the east pad, we consolidated over 30,000 sq feet of lower-level space originally used as prep kitchens, storage, and building mechanical rooms. Once this was complete, we were able to focus on finding the first retail anchor, eventually landing Target. After months of negotiation, the company signed a 15-year lease in 2019 for 33,000 square feet.  Target had experienced success with its small store format in Manhattan and made it a priority growth market.  Recognizing the retailer’s ability to attract a broader consumer base and drive co-tenancy, we made several more accommodations to get the deal done, specifically, helping facilitate their daily operations, logistics and marketing. First, we rebuilt two freight elevators and dedicated a new, 8,000 lbs car to Target. Then, we negotiated a window of time with the adjacent Westin to dedicate one of their two loading bays for Target’s exclusive use. Lastly, we allowed Target to build a five-story high LED sign above their store, which often features their mascot Spot and other dazzling 3D-like animations. When the location finally opened in April 2022, the store offered a CVS pharmacy, grab and go food options, and contactless grocery pickup - providing the broader appeal we had envisioned.

Target at our Times Square asset, E-Walk RetailOur Times Square asset, E-Walk Retail

Next, we looked at underutilized signage opportunities given the strategic location of current signage (94,000 people pass the signage each day). We reworked our lease with BIG Outdoor, a national media ad sales company, and have doubled the size of our digital billboard presence. The two faces of the massive corner display make up approximately 7,500 square feet of digital-out-of-home (DOOH) canvas, providing ample visibility for several blocks along both 42nd Street and 8th Avenue.

As consumers grow increasingly numb to conventional digital advertising and concerns surrounding privacy shift the industry landscape, DOOH has emerged as one of the fastest growing media channels, enabling brands to break through the digital clutter and showcase their products in a dynamic, larger-than-life manner. Today, BIG Outdoor’s signs remain oversubscribed and have outperformed our original underwriting, giving us the flexibility to offer prospective in-line tenants an opportunity to build their own signage (similar to Target’s towering vertical display) at no additional cost. The ability to offer this extra value has differentiated our property and played an integral role in attracting higher quality tenants.

Target at our Times Square asset, E-Walk RetailTarget at our Times Square asset, E-Walk Retail

Target’s expected arrival immediately created the co-tenancy we had hoped for. In February 2022, we were able to fill the west anchor with a 10,000-square-foot, two-floor lease with Five Below in February 2022. Offering a fun, treasure hunt experience for teens and tweens, the discount store chain has been a success story among brick-and-mortar retailers. After doubling its store count from 2016-2020, Five Below aims to triple its storefronts nationwide to 3,500 by 2030 and double its annual sales by 2025. The average customer visits the store ten times a year, buys sixty items, and spends a total of $150, generating excellent unit economics in a small footprint. At a time when the company was looking to penetrate and densify urban markets, the E Walk location was extremely desirable from a visibility and sales productivity perspective.

With many key pieces in place, we are looking forward to filling out the project given all the momentum we have built. After new leases with Target, Five Below, and the newly re-configured Regal E Walk Stadium, only prime, ground-floor, small spaces remain available for lease. Looking back, the company executed on a vision for E Walk under some difficult circumstances (a pandemic) yet stayed focused to get the job done. We kept our heads down, stayed close to our tenants, signed new leases and completed our capital improvement plan for the asset.  As we think about next challenges, continuing to monitor consumer, retail, and market trends remains a high priority.  We want to know how we can work with tenants to shape our spaces and meet consumer expectations as they evolve over time.

Our Times Square asset, E-Walk Retail