Northeast Real Estate Business

NOV-DEC 2015

Northeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Northeast United States.

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www.REBusinessOnline.com Northeast Real Estate Business • November/December 2015 • 59 they're exiting as well? Like luxury retailers, not super luxury retailers, but bridge. There's kind of a rule of thumb when you talk to the people at retailers that's a three-to-one ratio. If you reach that threshold, you are drowning the audience with your goods and taking it from aspirational to ubiquitous and then you remove the very reason people want the prod- uct. Those retailers that have made too much of their product for the out- lets have opened too many outlets. They dilute and ruin the brand, and now they're gasping for air, so fewer of those retailers are going to the out- let or value centers. There's going to be some shake out in that industry as well. Campione: One of the issues is af- ter the death of the lifestyle center you had a lot of developers that had these large sites; the outlet center was abuzz. All of a sudden you had every- one trying to enter a business that for many years the conventional develop- er would not go into. It was a whole different monster. So people tried to jump on the bandwagon. The reality is that other than the two major out- let players that know how to pick the site, the rest of them just started build- ing, and those are the ones that you'll see that are empty or will have two right next to each other. Can we go back to Queens for a second, because one of the things you mentioned was the footprint and comparing Brooklyn to Queens. What we're seeing from a development perspective and what we're hearing on my side of the table is that Queens is the next Brooklyn. Rabinowitz: I heard Manhattan is the new Brooklyn. Campione: What we're seeing with the developers in Queens is that they're looking for big box, they're looking for supermarket, and they're even talking outlets. The mentality is more suburban, and probably has always been that was since the 1950s and '60s, but it's not as urban as even Brooklyn is, and defnitely nothing like Manhattan. Everyone seems to want to get the footprint and the col- umn grids that are more suburban conventional. I don't know if that's because we've just crossed the river, and we're in Long Island City and Astoria and Jackson Heights is a hot spot. You can tell the push is going out there, at least it's on our boards, but no one wants a nonconventional shape. That is interesting when you discuss the footprints. King: You're onto something. I'm not sure that Queens is the next Brooklyn, but whatever they put in the water that made Brooklyn become so much more desirable is clearly a force that just moves out. And, like you said, it's easier once mainstream developers put a toe in the outer boroughs and realize this can makes sense for them. Then, where's the next opportunity? To some extent, and I hate to say this because it is my sandbox, Brooklyn is really played out and there are lots of folks who are looking further afeld. We just went through a whole crazi- ness at my frm and brought on 19 more agents, a dozen of which are fo- cused in the Queens marketplace be- cause we see it as the next land of op- portunity. I have a lot of people all day long who cold call owners. I suspect the owners they call in Brooklyn are receiving the third call they've gotten that week from an agent. It's a short conversation, but the Queens owners have not yet felt that love. Campione: What they put in the wa- ter is that it became affordable, and all of a sudden it's Brooklyn 20 years ago. I can remember when we frst opened the business some young kids that wanted to come to work with us would say they're moving to Dumbo. This was 15 to 18 years ago. We'd say 'really? Don't live in Dumbo just go to live in the village and stop pre- tending.' And now, Brooklyn, which was supposed to be affordable, is not. You've got middle class people moving to Brooklyn because they are priced out of Manhattan. They're will- ing to still keep their kids in school in Manhattan, commute or drive in if that's what's necessary. I think that younger generation that can't afford to shop in the city, now they're go- ing to Queens because that is the new frontier. Breslin: Queens doesn't have the type of land that's developable like Brook- lyn does. King: It's a zoning issue. There's more dirt in Queens. Queens geographi- cally is bigger. Brooklyn is more populous. Don't forget, Brooklyn un- derwent a whole bunch of rezoning initiatives under Bloomberg that ben- eftted areas since the time of Robert Moses. [Editor's note: Robert Moses was an urban planner largely credited with confguring many of New York City's "I'm feeling a bit more excited than last year," says Deborah Jackson, Cushman & Wakefeld Lee Spiegelman, Ripco Real Estate.

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