No kidding around at International Toy Center.
Financial services provider, Fidelity, just inked a 10-year lease to open its newest retail location at the ITC building at 200 Fifth Avenue. The company will occupy 5,300 SF of space at street level on the heavily trafficked corner of 23rd Street and Fifth Avenue previously occupied by American Express.
Fidelity is the second major "non-toy" company to sign a long-term lease at the ITC. Restaurateur Cipriani U.S.A. also recently signed a 20-year lease, said to be set at around $45 per SF, to open its newest location in 2004.
And Adventure Publishing Group signed a 10-year lease to re-locate its offices to the ITC's 1107 Broadway building, paying an average of $30 per SF.
A leading publisher of magazines for the toy and licensing industries, the move made "perfect sense" according to Jim Silver, Group Publisher for Adventure.
"Logistically, it's perfect for us to have our home offices in 1107 Broadway because of the mount of activity in the International Toy Center pertaining to the children's entertainment industry," said Silver.
The ITC is also welcoming back Hasbro, which is "reorganizing" at 21,000 SF space in the 1107 Broadway building after an absence of several years to make way for the new Home Depot soon to occupy its 23rd Street address. Hasbro already owns a company that has a lease in the building and is consolidating its operations there.
Since taking over the management of the 200 Fifth Avenue, LLC-owned building from Helmsely Spears last year, Cushman and Wakefield has committed to new initiatives to fully lease the one million SF of space that is the world famous Toy Building (which is actually two buildings connected by a 9th floor bridge.)
While the Fidelity deal somewhat bucks the trend at the ITC, according to Al Cleary, senior director at C&W, its all part of the process to create the right mix of tenants.
Fidelity required a high visibility position and the street level 23rd Street glass-fronted corner that had been vacated by American Express was ideally suited to their needs.
Toy companies, on the other hand, are more interested in buyers from big-name stores such as KB Toys, K-Mart and Toys 'R Us, who roam the building during regular trade events looking for the next big thing to stock their shelves. And the ITC is going all out to make sure these buyers find it with specially developed leasing packages aimed at not only showcasing the established toy favorites, but launching tomorrows Cabbage Patch Doll or Pokemon card. Currently, 86% of the building is leased to some of the biggest names in the $25 million a year toy business. From the latest craze in building blocks, Mega Bloks, to the educational empire that is Leapfrog, with a little Disney and Sesame Street rolled in, over 300 tenants lease showroom space, making the ITC the largest concentration of these companies in the world.
However, dozens of small or foreign-based businesses have taken then first baby steps into the market place with the help of the ITC's incubator and gallery programs.
After overseeing a $25 million refurbishment, Cushman and Wakefield is working with ITC management to aggressively market these programs, which have already played a part in the success stories for several businesses.
The incubator program helps young, start-up companies and inventors by offering a choice from 57 spaces, ranging from 70 SF to 258 SF of space at around $20 per SF, for lease during the annual toy fare for three consecutive years.
From the incubator program, firms can progress to the Gallery, which allows companies to rent a unit within a 32,000 SF floor for one year at around $40 per SF. The facility offers full conference facilities, reception and concierge and, most importantly, exposure for smaller companies or toy representatives looking to grow or find new representation.
One company that's taken advantage of the tenant-friendly programs at the ITC is Spin Master Ltd, the North American distributor for the Mighty Beanz, the Australian-manufactured jumping bean that looks set to be on every child's gift list this Christmas.
The company was already a market leader with its Shrinky Dink activity line, however, it has recently expanded its showroom space after the phenomenal success of the Mighty Beanz, which look set to be the season's first big hit, with sales expected to top $60 million this year and $200 million next year.
When John Magginnis, of PJ Toys, brought his plush toys and porcelain dolls to the ITC gallery tour years ago, he was sold on the idea of maintaining 48 running SF of space at a cost of $16,000 per year to best display his product. Maginnis, who estimates he makes around a dozen trips a year to his gallery space to meet with prospective buyers, not including the trade shows, said, "It's very important for us to be there, as most buyers come there at one time or other during the year. When they do, we're always ready to do business."
Hand Made Bows is another small business that took advantage of the program and leased gallery space several years ago for its decorative bows. Elissa Seguin, director of marketing, said there is no doubt tenancy has impacted the company's sales and prompted a move to a permanent 1,000 SF showroom last year.
"We do a lot of our sales during the toy fair in February and that alone makes it worthwhile to maintain a space in the Toy Center."
There's no doubt the media exposure tenancy at the toy center brings is also a big pull for prospective tenants. As well as being a year-round trade showroom, the ITC hosts the annual international Toy Fare every February, an October Expo, an International Halloween show in December, all events that are very media friendly.
As it moves to further expand the base of its buying opportunities with an emphasis on consumer products companies, the ITC is also actively pursuing juvenile, interactive electronic, publishing and Halloween seasonal products companies. And with its renewed commitment to tenant-friendly programs, the ITC team is certainly not kidding around about achieving 100 percent leased status.
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|Publication:||Real Estate Weekly|
|Date:||Oct 22, 2003|
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