American Eagle’s Flagship Times Square Store Seeks New Tenant
(Bloomberg) -- The search is on for a tenant at a Times Square building that is home to American Eagle Outfitters Inc.’s mega-flagship store.
Real estate brokers are marketing the entire four floors at 1551 Broadway, in the heart of the busy tourist district, according to people with knowledge of the matter, who asked not to be named because the plans are private. The property includes a multistory digital billboard, a prime advertising spot that’s visible by hundreds of thousands of visitors a day, according to marketing materials previewed by Bloomberg.
American Eagle Outfitters, based in Pittsburgh, has stood out among its retailer peers as relatively stable, with its growing Aerie lingerie line. Still, the company reported disappointing earnings last month, and said it was closing weaker stores.
“We have significant lease flexibility that enables us to exit less-desirable locations over time,” Chief Financial Officer Robert Madore said on a call with analysts. “We’ve closed approximately 130 underperforming stores since 2015 as we continued to strengthen our fleet.”
Asking retail rents in Times Square have jumped to an average of $1,675 a square foot, according to a report by commercial brokerage Jones Lang LaSalle Inc. That compares with less than $900 when the company signed the lease in 2007.
A representative for American Eagle Outfitters declined to comment on the marketing materials. A representative for CBRE Group Inc., the broker for the space, also declined to comment. The lease at 1551 Broadway runs through February 2024.
While Times Square hasn’t been hit as hard as other neighborhoods by the retail apocalypse, asking rents have slipped and some of the district’s largest merchants, including Toys “R” Us, have shuttered stores in recent years. Landlord Vornado Realty Trust shortened the lease and cut rents at Forever 21’s Times Square flagship after the retailer filed for bankruptcy in September.
The massive stores the area is known for are also losing favor among some retailers. Recent leases include a small-format Target location on 42nd Street between Seventh and Eighth avenues.
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