Friday 24 November 2017

Barneys new store in New York may be last for some time

Shopers in New York. Retail giant Barneys may roll back on new store openings.
Shopers in New York. Retail giant Barneys may roll back on new store openings.

David Levitt

With the return of Barneys New York to its original home in New York's Chelsea neighbourhood less than a month away, the chairman of the store's landlord said he's considering a pause in purchases of similar properties in Manhattan.

Acquisitions in the borough probably won't be as robust this year as in 2015, said Chaim Katzman, founder and chairman of both Equity One and its parent, Gazit-Globe, a Tel Aviv-based real estate firm with properties in more than 20 countries on four continents. "The market is very crowded," he said.

Gazit-Globe, owner of about 38pc of US affiliate Equity One, was among investors that rode the steep rise in US commercial real estate values to new highs in rents and occupancies. Equity One has shifted from owning mainly grocery- anchored suburban shopping centres, considered among the safest property types, to urban stores in such upscale cities as New York and San Francisco. In the past six years, the company acquired about $2bn of assets and sold about $1bn.

Katzman said he's now more excited about opportunities in Scandinavian cities, such as Oslo or Helsinki, as unfavourable currency-exchange rates cut into tourism in previously favored markets such as New York, Miami and Toronto.

In the US, Equity One is more inclined to redevelop properties it already owns rather than buy more, he said.

New York "is due for a little bit of a correction, but I was wrong before," Katzman said in an interview at the company's office on Manhattan's Park Avenue. Too many assets in New York and Miami "were bought with a very optimistic view of the world, and especially as to where luxury retail is going."

Equity One paid $55 million in 2011 for a stake in 101 Seventh Ave., a 57,000-square-foot building near 17th Street. (Bloomberg)

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