How Manhattan’s Shuttered Saks Store Shows the Direction Malls Across the Country Are Going
Less than three months after Saks Fifth Avenue bid adieu to its second New York City location in Brookfield Place, the downtown Manhattan mall has finalized a deal with a new tenant: a mixed-use conference and events space serving neighboring office workers.
Convene, which operates 30 locations nationwide, offers amenities such as in-house catering, events production, and community programming in partnership with local arts organizations. The 73,000-square-foot Brookfield Place space will have two meeting halls with the capacity to seat up to 500 people each — and since Saks’ parent company Hudson’s Bay Co. leases seven floors in the office tower upstairs, the retailer may still have the chance to use the location in a different capacity.
The announcement comes at a time when mall owners across the country are looking for innovative new ways to fill vacancies left by struggling retailers. Saks, for one, only opened its downtown store in September 2016, but after disappointing sales said it would close the location in order to focus on its recently-redesigned Fifth Avenue flagship, part of a broader effort on the part of HBC to trim its brick-and-mortar footprint. (Its downtown men’s store remains open.)
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Rather than try to find another department store to take over the space (and risk losing it to the same challenges that Saks faced) Brookfield is following an alternative playbook favored by many landlords today: looking beyond retail to in-demand tenants like coworking spaces, fitness centers and multi-use community hubs.
Convene and Brookfield struck a ten-year deal for the space, a significantly longer term than most retail tenants are currently signing on for: according to commercial real estate intelligence firm CoStar, the average lease length for general retail and apparel stores has shrunk from six years in 2007 to four-and-a-half years today.
Brookfield isn’t the only developer in New York betting on its vision of the mall of the future: Related Companies last week opened The Shops at Hudson Yards, the 1 million-square-foot retail and food destination for the company’s $25 billion Hudson Yards development, boasting Neiman Marcus’ first New York location alongside buzzy restaurants, residential towers and office buildings.
