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.