NEW YORK CITY—Hudson's Bay Co. is planning a Saks Off Fifth discount outlet at Brookfield Place and about 400,000 square feet of office space at One Liberty Plaza, according to the Wall Street Journal. Those downtown offices would serve as the consolidated US headquarters for Saks, Saks Off Fifth, Lord & Taylor—which combined with Hudson's Bay in 2008—and Hudson's Bay.
In all cases, the landlord would be Brookfield Office Properties. The company owns Brookfield Place as well as One Liberty Plaza, which sits across the street from the World Trade Center.
From a cost perspective alone, the move to Lower Manhattan is a savvy one, Avison Young principal Greg Kraut tells GlobeSt.com. “The delta in pricing between midtown and downtown may have been the major driver to relocate and given the fact that Saks probably didn't need all of their people in a high rent district near the store as well as getting some prime retail, the deal makes a lot of sense.”
The move also is a logical one for the community, retail expert Faith Hope Consolo, chairman of the retail practice at Douglas Elliman, tells GlobeSt.com. “As more affluent professionals now live Downtown, as well as work there, a second store will not cannibalize the Fifth Avenue flagship. They are two distinct luxury markets. Meanwhile, people who work in the region, as well as tourists, are looking for good merchandise at a value price.
“Soho has very few buildings that would be the right size for either a small, full-price Saks or Off Fifth,” she continues. “But the new developments downtown now make these locations possible. This is a great idea with great timing.”
It's also just a nice boost for the area, Consolo adds. “Nothing bigger or better could happen in retail Downtown; and for Brookfield Center, this move is brilliant. It combines and reinforces all that is great about the financial district as a destination for retail, office and residential. It is a city within a city”.
If the deals are completed, Hudson's Bay's offices would consolidate eight different offices across the US. Hudson's Bay and Brookfield are aiming to sign a deal before the end of the summer, a person involved in the negotiations tells the Journal.
The move points up a shift in what parts of the city house top executives says John Wheeler, a retail broker at JLL, who is marketing retail spaces at Brookfield Place. "It used to be in downtown, you'd be apologizing for being too far away from Fairfield County and Westchester. Today, CFOs or COOs are just as likely to choose to live in SoHo or Tribeca as Westchester, and much of their workforce is down here.”
Major investments in retail space at the World Trade Center and other locations have boosted the area's appeal as a high-end shopping district. Clothier Zara, for instance, agreed recently to move to a once-gritty corner at Fulton Street and Broadway.
Hudson's Bay, led by chief executive Richard Baker, paid about $2.9 billion last year for Saks Inc., the latest in a string of acquisitions Baker has made in the last 10 years.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
