By Sarah Trefethen
Vornado Realty Trust and Host Hotels & Resorts have reached an agreement for Vornado to redevelop the retail portion of the New York Marriott Marquis Times Square hotel, C.B. Richard Ellis announced this week.
Vornado plans to spend as much as $140 million to redevelop and substantially expand the existing retail space, including converting the below-grade parking garage into high-end retail space and adding six-story, LED signs on the hotel’s Times Square frontage, according to CBRE.
CBRE’s Eric Gelber, senior vice president; William Shanahan, vice chairman; Andrew Goldberg, executive vice president; and Darcy Stacom, vice chairman represented Host Hotels & Resorts, the owner of the New York Marriott Marquis Times Square hotel, in the transaction.
Retail brokers praised Vornado’s move.
“What they probably expect is changing it from tourist retail to regular retail, and that’s certainly a possibility and certainly a very good idea,” said Steve Rappaport, senior managing director at Sinvin Real Estate.
Fast-casual retailers such as Aeropostale, Abercrombie and Fitch, H&M and Muji would work “extraordinarily well” in the Marriot location, he said.
The hotel sits on Broadway between 45th and 46th Streets, one block south of the south-facing bleachers in the triangle between Broadway and Seventh Avenue.
“Because of the density of the traffic there, it’s a natural,” Rappaport said. “Every tourist is a consumer, it just depends what you put in front of their face. If you put fashion there, that’s what they’ll buy.”
Vornado’s strong record of retail redevelopment suggests good things for the hotel space, said Faith Hope Consolo, chairman of Prudential Douglas Elliman’s retail group.
“It always had crappy retail. They’re going to do a turnaround here just like they did in the Penn Station area. I think it’s a brilliant play,” she said. “Times Square has become for retail the center of the world, and they’re running out of good prime retail space on Broadway.”
Over the 20-year term of the lease, each party has options that, if exercised, would result in ownership of the leased space being conveyed to Vornado at a price based on the future cash flow of the leased property, according to CBRE.
Scott Nadeau, general manager of the New York Marriott Marquis, said in a statement that people in charge of the iconic hotel are excited about the new partnership.
“In the past few years, we have seen many new and exciting retailers opening in our neighborhood, using high technology in billboard “spectaculars” and store fronts. We are excited about the evolution of retail and billboard advertising, the hallmark of the visual experience for visitors to Times Square,” he said. “Vornado will develop and enhance new retail and billboard opportunities that will keep the New York Marriott Marquis at the forefront.”
The deal is a sign of the evolution of both the Marriot Marquis building and Times Square retail in general, according to Tim Tompkins, president of the Time Square Alliance.
“When it was built in the 70’s, literally the hotel was turned inward away from the street almost as a fortress against the street,” he said.
But today, the thriving retail scene and busy pedestrian plaza have set the scene for the block’s retail offering to expand beyond a lone Sunglass Hut, he said.
Consolo said: “It’s going to be like a fly trap for tourists.”