Adieu Bugs! Bonjour Vuitton!
The news brought a special joy to the members of New York's real estate community, many of whom considered the Warner store an eyesore on an otherwise swanky street.
According to Faith Hope Consolo the vice-chairman of Garrick-Aug Worldwide and a retail specialist the French leather goods retailer's move will be a reinforcement of the street."
"If you look at the four corners at 57th Street and Fifth Avenue, you have Tiffany's, Bergdorf Goodman, Bangor... They are all luxury retailers, and Vuitton will fit into the street," she said.
Philip Futterman, president of the Futterman Organization Inc., seconded her opinion. "It the area," he said. "Everybody was very distressed when the Warner Brothers took the location ten years ago, and this will reinstate Fifth Avenue as a luxury retail location."
Alan Victor, however, the executive vice president of the Lansco Corp., who served as a broker for Warner Brothers when it decided to take the space, pointed out that the retailer was not so much out of place, as it had bad timing. "You have to remember that timing is everything," he said. "At the time when Warner entered that location, entertainment retail was very strong. What we are seeing now, however, is that 57th St. is regaining its high-end, luxury user."
According to Futterman, the rebirth of Times Square might be partly responsible for the area's return to its high-end roots. "Warner Brothers took this location because of the heavy tourist and retail traffic, and because they had the money to pay the rent," he said. "But the big thing that has happened since then is Times Square. Ten years ago, it was a very, undesirable from the standpoint of tourism and retail. So, they tried to feed off high-end retail at 57th Street, although they didn't fit in. Now, however, Warner took the space in the Times Square area."
Incidentally, Futterman said that Warner Brothers was only one of several stores that were brining the 57th Street area down -- there was also Nike, Disney, the Coca-Cola store, Planet Hollywood, and Motown. "A few years ago everyone was afraid that 57th St. would deteriorate," he explained. Now, however, with the Coca-Cola, Motown, and Planet Hollywood gone, and Warner Brothers moving out, the area is regaining its purity.
"Fifth Avenue is turning into luxury goods retail once again," said Ben Fox, of Newmark New Spectrum Realty Services, Inc. "The Warner Brothers relocation is obviously terrific for the street -- it is more natural that a Louis Vuitton would be there, than a Warner Brothers store."
But although 57th Street is famous for its triple-digit rents, no one seems to know how much the fashion retailer has paid for the property. "It is difficult to tell what Louis Vuitton will pay, because they are going to net lease the entire building," said Victor. "We have to assume for sure that they will pay more than Warner Brothers was paying, but keep in mind, that Warner didn't lease the entire building."
According to Consolo, the rents might have increased as much as ten times since Warner moved in. "Warner took that location in the early 1990's, so the deal was not even close to what it is today," she said. "Today, that corner is worth $1,000 on the ground level."
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|Title Annotation:||Louis Vuitton S.A.|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Jan 17, 2001|
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