As retail continues its attempts to block and counter a host of challenges — not the least of which is a general shift away from brick-and-mortar to online — Brookfield Place, with its powerful mix of luxury shopping, eclectic dining experiences and accessibility, is perhaps a beacon of hope.
At a time when brands and retailers are ditching stores left and right, the redevelopment — a massive overhaul of the former World Financial Center into Brookfield — has attracted the likes of Saks Fifth Avenue, Diane von Furstenberg, Burberry and Bottega Veneta.
“I think Brookfield Place is a very unique asset for a lot of reasons: We’re on the water, we have this beautiful winter garden, and we have this amazing collection of retailers — we’re doing great,” explained Michael Goldban, SVP of retail leasing at Brookfield Place. “I think that, in general, the A+ shopping center product around the country are doing just fine, and I think that they will continue to do just fine. Even though there are some challenges in the retail world, people still love to go shopping, and they need to go shopping.”
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Here, Goldban gives Footwear News the details on Brookfield Place’s secret sauce for reinvigorating excitement around downtown Manhattan’s retail real estate.
What spurred the initial idea to redevelop the former World Financial Center?
MG: We had 8 million square feet of office space, and there were some major anchor tenants that told us they were going to leave downtown. We scratched our heads and said: “How are we going to make this [space] buyable in the future? Why are 21st-century office tenants going to want an office here?” And that’s kind of what started the idea. [We said,] “Let’s reposition this project and let’s try to make it a world-class mixed-use product.
What were some of the first steps you took in the redevelopment?
MG: For us, the first key piece of the puzzle was getting the food right. Food really is like the new department store. So we started with food, which was a huge success, and from there it turned into this really amazing luxury shopping experience. We’ve been thrilled with how it’s been received in the market, and it’s a very special and unique place.
What has made Brookfield so attractive to major luxury retail tenants?
MG: Real estate is about location. Lower Manhattan had historically been an underserved retail market. So that was the first piece that was very compelling. The demographics downtown were really strong — that obviously got all of the luxury retailers interested. There’s a great office population — so there’s a daytime population, with millions of square feet of office space — and they’re highly paid white-collar workers. And there was always transit, but with what happened at the Fulton train station, with the Path train coming to the Oculus, that sort of added this whole new dimension of daily commuter [traffic]. Lastly were the tourists. There are about 20 million tourists that come downtown. And tourists have historically been really great customers for luxury products. So those things together really made this a true luxury destination.
How has the success rate been among retail tenants at Brookfield Place?
MG: We’ve been pretty lucky, but generally in projects there is some attrition, and that’s not necessarily indicative of the strength of a project of the market. Shopping center merchandising is a challenging effort — it’s an art and not a science. Sometimes there are tenants that are perfect for a project, and there are [those tenants] who are not so good. Retail is a very tough business — you miss a season and suddenly the stock is down and that tenant has to try to retrench.
How have you handled those situations?
MG: Those things are a very normal process. But we pay a tremendous amount of attention to curating the right mix. I think we have a great mix at Brookfield Place, and we’re always trying to improve. So when there’s that attrition that happens, we’re always thinking ahead about who are our future tenants — the forward-looking tenants who are being experimental with their brands and their merchandise.
Are you worried about the future of luxury retail?
MG: Luxury is going through a cyclical dip right now. But I think it is a cycle and not the end of the world. So we feel really bullish about New York City and about the economy. The retail shopping experience is not going away — it’s going to continue to grow. So right now it’s a little bit of a cyclical dip. But we feel great about where the retail market is going. The luxury tenants are actually starting to — [based on] our experience — dip their toes in, and they are thinking about expansion again. We’re starting to see some good sales reports recently, which I think are giving momentum to luxury buyers and luxury tenants. So I think we’re going to start to see a rebound toward the later part of the year, with luxury deals announced.
In the meantime, how does Brookfield plan to continue luring in shoppers and tenants?
MG: Our overall strategy for retail is about place-making. For example: We’re constantly programming our winter garden with really interesting events and making it a special place to come, and I think that’s a really big differentiator for us. We spend a lot of time thinking about what are great activations. And we spend a lot of time on our pop-up leasing program. We’ve designated spaces throughout our project where, every three to six months, we find new tenants to come in and we ask them to come up with really creative designs. These deals are intended to be short-term, because we want new tenants to come and add vibrancy to the shopping experience.