Home Depot soon to open its first Manhattan store.

On September 10, Home Depot will open its first New York City store at the former Stern's and Hasbro building located at 28 and 40 W. 23rd St., between Fifth and Sixth Avenues. The opening concludes a process that began in 2001 to convert this historic landmark property to its original retail use.

"It is really gratifying to see a deal you have originated have a dramatic impact on the streetscape," said Moshe Sukenik, a Newmark & Company broker, who along with colleague Christopher Mongeluzo negotiated the 120,500 s/f deal. "Home Depot will have a major impact on the area and will dramatically change Manhattan shopping for home improvement products."

The work that Newmark's Sukenik and Mongeluzo performed on the Home Depot deal earned them, along with Peter Cirlin and Steven Schwartz of Retail Realty, the "Most Creative Retail Deal of the Year" honor for 2003 from the Real Estate Board of New York.

The 28 and 40 W. 23rd St. complex, which totals 500,000 s/f, was originally built in 1878 and for some time the entire property served as the home of a Stem's department store. In early 2001, two years after Newmark arranged a lease extension for Hasbro at 40 W. 23rd St. that included adjacent sublease space at 28 W. 23rd St., the toy manufacturer decided it would no longer host major sales events in Manhattan and therefore no longer required the office and showroom spaces. Sukenik and Mongeluzo were retained to handle the requirement, but since they felt that the space would be difficult to market for showroom or office users they decided to focus their efforts on a possible return to the complex's original retail use.

Mr. Sukenik explained that this a challenge, since Hasbro had earlier closed off the property's ground floor windows from the street. The space configuration made it difficult to adapt for multi-tenant retail use and the property's location was surrounded by uninspired storefronts. However, the building was close to two major retail destinations, the Flatiron District and the Ladies Mile shopping area.

Based on those factors, Newmark decided the property would work for a "Big Box" user. After being rejected by Home Depot Expo executives, Newmark approached the Retail Realty brokers who had a relationship with the parent Home Depot.

The dialogue between the parties progressed until Sept. 11, 2001, when the project was put on hold just as Home Depot and Hasbro were about to agree to a nine-year sublease deal. Talks resumed in the rail of 2002, but the negotiations were plagued with starts and stops as senior executives at Home Depot changed.

Just as the deal appeared doomed, Newmark and Retail Realty representatives took the Home Depot operations team from Atlanta on a tour of the building and together ironed out the logistical concerns. As part of the deal, a new certificate of occupancy had to be obtained since the old C/O did not allow for retail use at the main building.