Not long after David LaPierre joined CB Richard Ellis, back when the firm was known as Edward S. Gordon, he inked a deal on Spring Street for Caswell and Massey, a 260-year-old apothecary that claims to have sold cologne to George Washington.
Nearly 20 years later, he finds himself in midtown mulling ideas for what could be one of the most ultra-modern retail sites in the city. LaPierre has begun courting tenants for the mixed-use complex now under construction on 57th Street between Park and Madison Avenues, at the site of the now-demolished Drake Hotel.
CIM Group — which bought the coveted site from Harry Macklowe last January — has been tight lipped about plans for the site, although Macklowe told guests at a Massey Knakal real estate symposium last month it would be a “monumental building” and “as much of an icon as the Apple cube,” that he welcomed to the General Motors Building when he owned it.
LaPierre predicts 57th Street is ripe for the arrival of high-end electronics brands and said, “I can see Apple deciding it needs to off-load volume on Fifth Avenue with a creative flagship.”
Under current plans for the 200,000 s/f Drake project, which is slated for completion in 2015, Apple would have the artistic license to design its own storefront, were it to so choose. “We’ll let people create a façade,” LaPierre said, adding that talks are in the early stages with clothiers, jewelry boutiques, and other upscale retailers that have traditionally been attracted to the block.
At Milford Plaza, a hotel on Eighth Avenue between 44th and 45th Streets with 30,000 s/f of vacant retail space, which has already undergone a thorough makeover, LaPierre expects to deliver tenants “within the year.” He said, “Milford completely refaced the building.” He has spoken with “cool apparel-type brands” and service-oriented retailers, all hoping to capitalize on the building’s location in what promises to be the Big Apple’s next hot retail corridor, within the shadow of Times Square and 40% of the city’s theaters.
But don’t expect an Eataly II to sign a lease. “There’s been a lack of interest from food businesses,” LaPierre noted.
LaPierre recalled a lengthy campaign working with celebrity chef Mario Batali checking out sites for the Italian food emporium when it first began scouting for its first US outpost. Batali and his business partner, Joe Bastianich, quickly ruled out anything above 23rd Street.
“They’re downtown guys,” said LaPierre, who grew up in Syracuse and worked for Pyramid, a developer of shopping centers in upstate New York, before kicking off his brokerage career in Manhattan in 1994.
Wary of setting up shop next door to a Whole Foods — yet hoping to be close enough to tap into an upscale foodie market — the team zeroed in on Union Square. “Not that they were going to compete,” LaPierre said, “but Eataly does have a strong grocery component.”
A front-running candidate was the Metronome building at 915 Broadway. “It was for a much, much smaller Eataly,” he said. “Close to 20,000 s/f.”
Then the perfect fit came along: the Toy Building at 200 Fifth Avenue, which had been home to a Cipriani catering facility until the company was cut from its lease after facing charges of tax fraud.
Located across from Madison Square Park, catty-corner from the Flatiron Building, and a half-mile from the nearest Whole Foods, the tower was at the heart of what had long been a stable retail market, and just the right distance from Union Square. Not to mention, the 50,000 s/f of vacant space fittingly evoked Old World Europe, with an arched entryway and some marble walls.
“It’s got great infrastructure inside already,” said LaPierre. “[Batali and Bastianich] didn’t want to have to do everything from scratch with their own capital.”
Though the Ace Hotel and the Breslin, Ken Friedman and April Bloomfield’s acclaimed gastropub, were bringing gourmet flavor to the neighborhood, it took 200 Fifth’s landlord some convincing to lease the space to a purveyor of handmade pastas and artisanal paninis.
At the time, the space seemed more suited for a national chain like TJ Maxx, LaPierre said. “You guys don’t know it, but you need each other,” LaPierre recalled thinking, when negotiations turned particularly tense. “It took me a long time to get their attention.”
The recession ended up working in LaPierre’s favor. In November 2009, Eataly signed a 44,000 s/f lease below market rate. “The timing of the market was such that rent wasn’t the only driving factor,” said LaPierre. “The quality of the tenant at the end of the day was as important.”
The emporium’s arrival last year, LaPierre said, was a home run for all involved. “It does the right thing for the building,” he explained. “You can tell simply by the traffic. It’s a very unique retail deal.”
LaPierre is no stranger to securing flagship leases. In 2000, he brought Toys R Us to Times Square, when the crime-ridden neighborhood was on a verge of a renaissance. “Times Square was a whole different animal in the ‘90s, and now it’s a family place, it’s a young place,” he said. “I really feel that Toys R Us was the biggest catalyst.”
At the start of the new millennium, LaPierre said, retail rents in the bowtie portion of the neighborhood were about $250 a foot. Now, at roughly $1,000 a foot, they’re the most expensive in the Big Apple after Fifth Avenue.