Article submitted by Bob Kirby, Associate Broker for Saurage Rotenberg Commercial Real Estate
Written by Mark Heschmeyer | October 12, 2017
Lost in the coverage of Amazon’s very public search for a second, multi-billion dollar national headquarters, was the barely-noticed lease the company signed in New York City last month. Yet that lease could signal billions of dollars in losses coming for retail commercial real estate across the country.
Amazon signed a 15-year office lease for 360,000 square feet at Brookfield Properties’ recently-renovated 5 Manhattan West building. Amazon will take the entire sixth and seventh floors of the 2.15 million-square-foot tower as well as part of the eighth and 10th floors in a move that is expected to bring 2,000 jobs to the Penn Plaza / Garment District submarket of Manhattan.
Amazon Fashion has also previously invested $9 million in a 40,000-square-foot fashion photo studio in Brooklyn (pictured).
“We’re excited to expand our presence in New York – we have always found great talent here,” said Paul Kotas, Amazon’s senior vice president of worldwide advertising.
Those jobs will be coming primarily in the Amazon Fashion and advertising divisions, and that signals the online retail behemoth is getting more serious about advancing its fashion and apparel sales. In the past year alone, it has introduced seven private apparel brands to its Prime members, including Goodthreads, Amazon Essentials, Paris Sunday, Mae, Ella Moon, Buttoned Down and Lark & Ro.
A hypothetical rapid rise in Amazon’s U.S. apparel market share could have significant credit implications for existing retailers, REITs and CMBS transactions, according to Fitch Ratings in a ‘shock scenario report’ published last month.
Worst-Case Scenario
Bob Kirby, a commercial leasing and sales consultant with Saurage Rotenberg Commercial Real Estate, has over 37 years of sales and management experience. Licensed in Louisiana and Mississippi, Bob is a member of the Mississippi Commercial Association of REALTORS® (MCAR); the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID); a candidate member of the Certified Commercial Investment Member Institute (CCIM); and an affiliate member of the National Association of REALTORS® (NAR) and NAR Commercial.
Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).
