A Bronx Retailing Hub Is Getting Offices, Too
New York Times 7/11/2007
By Sana Siwolop
As a borough without a well-defined business district like those in Manhattan or even Brooklyn or Queens, the Bronx has traditionally not experienced heavy development of Class A office space. But that is changing, with the expansion of the Hutchinson Metro Center, an office complex near a heavily traveled highway, and the conversion of a prominent site on Fordham Road used for decades almost exclusively for retailing.
The second site will cost $120 million to develop and will combine new offices with modernized store space at the corner of East Fordham Road and Webster Avenue, a well-known intersection on the popular Fordham Road shopping corridor.
The 285,000-square-foot project is called Fordham Place, and it is geared to renovating and expanding the large wedge-shaped building that has long been a fixture at the corner. It sits next to the Fordham stop for the Metro-North New Haven line and diagonally across the street from Rose Hill, the main campus of Fordham University.
Once home to the Rogers department store, the building for years housed a four-story 86,000-square-foot Sears store that sat beneath two floors of office tenants.
In 2004, the building was bought by a development partnership made up of Acadia Realty Trust of White Plains and Aaron Malinsky and Paul Slayton, who head the Manhattan-based P/A Associates.
Reports at the time emphasized the plans to upgrade the retailing at the site. But last week, Kenneth F. Bernstein, president and chief executive of Acadia Realty, said that all along his company and its partners were “cautiously optimistic” the site might also be used for offices.
The owners eventually decided to expand the scope of the project, based on both growing demand for shopping within the Bronx and interest they were seeing in a 223,000-square-foot office building that Acadia Realty bought in 2005 on East 161st Street, opposite the Bronx Courthouse complex, which had recently been completed.
At the site of the Fordham Place project, Mr. Bernstein said, “since the days of Rogers, this building has been the easternmost anchor of what is a dynamic open-air shopping mall, with tremendous sales per square foot and tremendous productivity,” referring to the entire Fordham Road shopping corridor.
He added that while his company’s building on 161st Street is fully leased, it is continuing to generate interest from potential tenants like law firms that “want all the benefits of being in New York City while still paying significantly less” than what they might pay in Manhattan.
When it is fully built out, Fordham Place will use the site of the old Sears building as well as two small parking lots that sat next door, and, according to its developers, will offer some 150,000 square feet of modern Class A office space and modern retail space elsewhere.
Plans call for reopening a Sears store and also for building a 14-story office tower immediately adjacent to it. Retailers will be in the bottom three floors of the tower building as well as on its basement concourse level. Shoppers will enter the building through a covered entrance at the corner of East Fordham Road and Webster Avenue.
Prospective office tenants, meanwhile, will have access to spaces covering as much as 36,000 square feet on either the fifth or sixth floor or 12,000 to 14,000 square feet of space on each floor in the tower.
In putting up Class A office space in the Bronx, the developers are following the example of Hutchinson Metro Center, a large office complex off the Hutchinson River Parkway in the Pelham Bay section, being built by the Simone Development Companies of New Rochelle, N.Y.
The developers of Fordham Place expect their site to prove popular with office tenants who want high-quality space in the Bronx, but who also want to provide employees with good commuting options that do not require them to drive.
“When you look at Hutchinson Metro Center, it’s truly suburban,” Mr. Malinsky said. “This project sits right on top of a Metro-North station, and we have every single bus line coming to this location, as well as two nearby subway lines.”
Still, Hutchinson Metro Center has produced strong leasing numbers lately.
Brokers at Cushman & Wakefield, the real estate services company that is the leasing agent for the center, say the first building at the complex offered 460,000 square feet of Class A office space that was fully leased in a little more than two years after construction began, and now negotiations are taking place for about 25 percent of the space at a new 260,000 square-foot tower that is under construction.
Tara I. Stacom, a Cushman & Wakefield vice chairman, estimated that about a quarter of the companies “seriously interested” in space at the new Hutchinson tower are businesses in Manhattan.
Acadia and P/A Associates, not new to urban redevelopment, are working on 10 projects in New York City and Westchester County. Mr. Malinsky was one of three partners who helped develop River Plaza, a 9.5-acre shopping complex in the Marble Hill section of the Bronx, which opened in August 2004. It is home to national retailers like Target, Marshall’s, and Starbucks.
Developers have not always had it easy luring big-box tenants to the predominantly Hispanic neighborhood that surrounds East Fordham Road, but that may be changing.
Cheryl Chase, the general counsel and executive vice president at Chase Enterprises, the longtime owners of One Fordham Plaza, a 557,000-square-foot office and retail building a block away from the old Sears Building, said her company, together with two partners, is about to upgrade 100,000 square feet of retail space at the property to meet growing interest from retailers in the area. Her company, she said, hopes to have two spaces of about 30,000 space feet on the building’s second floor for big-box tenants.
Any retail space that is scheduled to be offered at Fordham Place is already either leased or in negotiations, its developers say. According to Mr. Malinsky, tenants include Sears, which will have a 35,000-square-foot store in the basement; Walgreens, which will have an 11,000-square-foot drugstore on the ground floor; and Best Buy, which signed a lease at the end of June for 35,000 square feet on the building’s second floor. Construction is to be completed next year.
He added that negotiations are under way with three other prospective tenants: a restaurant, a bank and a health club that is interested in the entire third floor, which measures about 36,000 square feet.