Time to Reflect
Dec 1, 2004 12:00 PM, David Koch
As the Shoppes at Columbus Circle in the $1.7 billion Time Warner Center closes in on its first anniversary, the developer is optimistic that the vertical center in New York has overcome some early snags to post strong sales.
“We are going to be in excess of a $1,000 per square foot,” says Webber Hudson, executive vice president of Related Urban Development. “That performance cuts across the different retail categories, but tenants have been averaging in that area.”
The center, with its high-end tenant roster, does not draw the typical mall crowd, but what it lacks in traffic it makes up for in opulence. “High-end stores like those at the Shoppes at Columbus Circle don't have to have a lot of volume to be extremely profitable,” says Paco Underhill, managing director of New York-based Envirosell Inc.
Still, the number quoted by Hudson is down from the figure of $1,400 per square foot he reported in May, even after subtracting a “honeymoon premium” for the first two months of business. That compares with an industry high of $1,432 a square foot for the Forum Shops in Las Vegas, before Simon Property Group opened the addition to the grand mall at Caesar's Palace.
Rocky start
Part of the project got off to a rocky start as one upscale restaurant, Per Se, had a fire in February. The restaurant opened a few months later and now has a two month waiting list despite a prix fixe menu that tops $150 a person, Hudson says. V Steakhouse is recovering from its one-star review in The New York Times. “V Steak is large and it's doing impressive numbers,” says Hudson. He adds that two of the restaurants on the center's fourth floor are drawing sales of $1,000 per square foot.
Another major component of the project, Jazz at Lincoln Center, opened in October to rave reviews. Webber expects the venue to draw thousands more to the center.
If anyone knows how to build a vertical mall it would be Ken Himmel, the Related Urban CEO who was responsible for Chicago's Water Tower Place, the country's first vertical mall. “That mall took time to catch on,” Himmel has said.
Full sales for the mall won't be available until February.
Other analysts remain cautious. “Obviously, it takes time for a center like this to establish itself,” says Jedd Nero, executive vice president at CB Richard Ellis Inc.
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