Party’s over: Neiman Marcus to close its Hudson Yards location

Neiman Marcus at Hudson Yards in New York and Neiman Marcus CEO Geoffroy van Raemdonck (Credit: Neiman Marcus by Noam Galai/Getty Images; van Raemdonck by JOE SCHILDHORN/Patrick McMullan via Getty Images )

Neiman Marcus at Hudson Yards in New York and Neiman Marcus CEO Geoffroy van Raemdonck (Credit: Neiman Marcus by Noam Galai/Getty Images; van Raemdonck by JOE SCHILDHORN/Patrick McMullan via Getty Images )

At an invite-only party in March 2019, surrounded by a marching band, tap dancers, a-capella singers and a who’s-who of New York’s real estate elite, HFZ Capital’s Ziel Feldman told a reporter that Related Companies had breathed new life into the West Side of Manhattan with the grand opening of the seven-level Hudson Yards mall.

“Hats off to them for being able to actually open and in a challenging retail environment,” he said. “Everything looks beautiful.”

But the outlook for Related’s crown retail jewel dimmed considerably Thursday, when Neiman Marcus announced in court filings that its flagship store in Hudson Yards would be shuttered for good.

The struggling retailer also plans to close three other locations – a 92,000-square-foot store in Fort Lauderdale, Florida; a 53,000-square-foot store in Palm Beach, Florida; and a 125,000-square-foot shop in Bellevue, Washington.

The Dallas Morning News first reported the closures.

“We have carefully analyzed all of the changes that have occurred in the retail environment as a result of COVID-19,” Amber Seikaly, Neiman Marcus vice president, said in a statement. “Customers are and will continue to shop differently than they did prior to the pandemic.”

“A physical location in Hudson Yards is no longer an ideal space for us given the preponderance of restaurants and future office space in that mall,” she added.

The closure of the New York store, which served as the anchor tenant of the Hudson Yards mall, is a blow for developers Related and Oxford Properties, and comes just 16 months after the mall opened. The developers reportedly covered the costs for the retailer to build out the 190,000 square-foot location, and agreed to an arrangement that involved Neiman Marcus paying a portion of sales in exchange for rent.

Neiman Marcus sought Chapter 11 bankruptcy protection in May, with CEO Geoffroy van Raemdonck stating that the coronavirus pandemic had put “inexorable pressure” on his business. The retailer is among several to file for bankruptcy since the pandemic hit, including J Crew and Brooks Brothers.

Although Neiman Marcus said it planned to emerge from bankruptcy by fall — and mass store closures were not part of the plan — Related began to shop around the site as a potential office location.

Reached for comment about the latest announcement, a representative for Related said in a statement that it was “unfortunate that Neiman Marcus was unable to achieve the success that other retailers have found at Hudson Yards,” adding that “This opens up a great opportunity to create incredibly attractive office space with the largest floor plates available in New York City, a private ground floor entrance, and 18 foot high ceilings.”

A marketing document obtained by The Real Deal showed that the space, which spans over three floors, is being pitched as a “campus for innovation at the heart of NYC’s most exciting new neighborhood.”

In her statement, Seikaly said that rather than keeping the Hudson Yards location open, the retailer was “purposefully focusing on the unique relationships we already have with our loyal luxury customers at Bergdorf Goodman, and we will continue to serve our Neiman Marcus customers through our digital selling channel and our other tristate-area Neiman Marcus stores.”

Related breaks ground on second phase of CityPlace project

CityPlace was renamed Rosemary Square

From left: Rendering of Rosemary Avenue and the Water Pavilion with Stephen Ross

Related Companies is making progress on its redevelopment of CityPlace in West Palm Beach.

The New York developer announced it is officially changing the property’s name to “Rosemary Square” and is breaking ground on phase two of its plans for the mixed-use property. The project calls for a redesigned plaza, public spaces, green areas, outdoor dining venues, new stores and interactive art, according to a release.

Urban design firm Gehl, architect David Manfredi, landscaper Matt Hadden and sustainability consultant the Spinnaker Group are designing phase two.

Related is planning to invest nearly $550 million into projects in downtown West Palm, including a new mixed-use luxury residential tower, a second hotel next to the Hilton West Palm Beach, and 360 Rosemary, a new 300,000-square-foot office tower. The developer secured approval in November for a 21-story apartment building on the site of a former Macy’s building at CityPlace.

Related is also tied up in litigation with its lenders over CityPlace’s $150 million mortgage. In a counterclaim filed earlier this year, Wells Fargo, a trustee for CityPlace’s lender Credit Suisse Commercial Mortgage, is alleging that CityPlace’s appraisal for its loan was based on misleading and inaccurate information given to its appraiser.

The Rosemary Square project calls for the installation of “Water Pavilion West Palm Beach,” a sculpture by Danish artist Jeppe Hein; the opening of True Food Kitchen, a 6,000-square-foot restaurant that’s expected to open in late fall; seafood restaurant High Dive by Michelin-starred Jeremy Bearman, also set to open in the fall; Sur La Table; Barrio Sangria Bar; and the re-opening of The Shack.

Tacos & Hip Hop by DJ Steve Pershad and local taqueria Zipitios, owned by Ricky Perez, are also planning to open as pop-ups.

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Bankruptcy judge approves sale of Palm House Hotel for $40M

Bankruptcy judge approves sale of Palm House Hotel for $40M

The sale to London + Regional Properties ends the bidding for the unfinished EB-5 project

March 11, 2019 05:30PM

Palm House Hotel

A bankruptcy judge finally approved the sale of the troubled Palm House Hotel to a U.S. affiliate of London + Regional Properties for $39.6 million.

London + Regional Properties, a U.K.-based luxury hotel and resort company, beat Related Cos. to buy the former failed EB-5 project in Palm Beach, according to the Palm Beach Daily News.

The judge declined to accept a last minute bid by Wellington developer Glenn Straub whose lawyer said the developer was prepared to pay $40.6 million for the property, according to the Daily News. But the judge ruled it down, saying it came too late in the process. The bankruptcy judge also previously ruled down a “credit bid” by Straub, which would allow him to make an offer without putting down any cash for the condo-hotel project at 160 Royal Palm Way, according to the Daily News.

London + Regional Properties is a private real estate investment firm with almost $12 billion in assets. The company owns the 453-room London Hilton hotel on Park Lane in London’s Mayfair neighborhood.

Some of the proceeds of the sale would go toward paying EB-5 investors who invested $500,000 in the project in order to get a green card. The investors have not yet been paid back.

Federal officials have charged the former developer of the Palm House, Robert Matthews, with multiple counts of wire and bank fraud and money laundering over the development.

[Palm Beach Daily News] — Keith Larsen

Related offers two-year leaseback option at W Fort Lauderdale

Stephen Ross, Craig Studnicky and the W Fort Lauderdale
RelatedISG is now offering buyers a two-year leaseback option for units at the W Residences Fort Lauderdale.
The program is aimed at attracting buyers to the waterfront Fort Lauderdale Beach condo-hotel. The developer, Related Companies, paid $90 million for the project from the Y Group in 2009 after it was completed. The Y Group had sold 24 of 171 units at the time. Since then, Related sold 65 units, according to RelatedISG principal Craig Studnicky. That brings sales up to 50 percent.
Studnicky hopes the program will give buyers confidence in the development. “Psychologically, it takes the nervousness away from the buyer,” he said. “It gives the buyers and real estate brokers in South Florida tremendous confidence in the market. From a PR standpoint, it’s perfect.”
Under the leaseback program, buyers would receive 8 percent of the net purchase price on some two-bedroom, oceanfront units for two years. Prices range from $900,000 to more than $1 million, which means buyers would receive at least $72,000 annually for two years. After Related signs leaseback agreements with buyers, it then turns the units over to Starwood Hotels & Resorts to manage.
In the past, RelatedISG has offered to credit the project’s buyers’ condo fees, which average $1,400 a month or nearly $17,000 a year, but Studnicky said the new program “trumps everything.” Last year, the brokerage announced it was offering 6 percent referral fees to agents from New York in a push to attract buyers from the Big Apple.
Sales are led by Rebecca Batterman, who has four agents working on the project.
Related is also wrapping up a $60 million renovation of the project, led by Meyer Davis Studio.
Last year, the Related Group and Dezer Development announced a similar leaseback program to buyers at Hyde Midtown, which is now nearly 90 percent sold.

Source: The Real Deal Miami