Colorado Real Estate Journal - November 4, 2015
Location, location, location. Those have been the three most important things in real estate for as long as Mark Sidell can remember. “I think I can make a pretty good argument, when it comes to retail real estate, the three most important things are experience, experience and experience … and don’t forget the location,” said Sidell, president of Gart Properties. The experience will be unmatched, he said, at the recently announced, newest anchor tenant at Gart’s Denver Pavilions. Uniqlo, a Japanese casual wear clothing store, will lease 27,500 square feet at Tremont Place and the 16th Street Mall, where Barnes & Noble is currently located. Barnes & Noble, an original tenant at the Pavilions, will close at the end of the year. Barnes & Noble wanted to keep its two-level store open through the Christmas shopping season, Sidell said. Uniqlo, for “unique clothing,” will open in the fall of 2016, he said. Uniqlo is part of the Japanesebased Fast Retailing chain. The chain’s founder, Tadashi Yanai, has a net worth of $19.9 billion, making him the richest man in Japan, according to Forbes Magazine. “They are expanding around the U.S. and the world; they are especially expanding outside of their home in Japan and throughout Asia, Australia, Europe and the U.S.,” Sidell said. “They have this concept that fits in well with (other anchors) at Pavilions such as H&M and Forever 21,” Sidell said. H&M recently expanded its footprint in Pavilions by taking another 10,000 sf of space. H&M, Forever 21 and Uniqlo, “each has a slightly different concept, so they will complement each other,” Sidell said. Uniqlo, he said, might carry a “puffy jacket” that would cost $300 at Patagonia or North Face and sell it for about $89, he said. “And they might have a cashmere sweater that would cost you $300 at Nordstrom, and their version would cost you $79 or $89,” Sidell said. He said he and the Gart family have long been aware of and fans of the various retailers operated by Fast Retailing. “Especially with the Gart family retail legacy, we make it our business to know what are the hot retailers in the U.S. and globally,” Sidell said. So two years ago, when Stuart Zall of the Denver-based Zall Co., offered to introduce Sidell and his team to Uniqlo officials at an International Council of Shopping Centers convention in Las Vegas, they jumped at the opportunity. “Stuart Zall is a good friend of ours,” having also represented H&M, which at the time, like Uniqlo, was a first-to-market retailer for Denver. In fact, the Pavilions might be the only Uniqlo in the Denver area for two years or so after it opens. Even after Uniqlo expands in the metro area, Pavilions will remain its flagship store, he said. Sidell said his first job was to convince Uniqlo that Denver was a good fit for it. While the first Uniqlo in the U.S. opened in New York a decade ago, the only other store in the central U.S. opened in Chicago about two weeks ago. “We knew Denver, particularly with its growth in the millennial population segment, would be a great fit for them,” Sidell said. The Barnes & Noble space was a prime location that was ready to go for the right tenant, he said. “When the Barnes & Noble lease was coming up a couple of years ago, we negotiated in their lease that allowed us to ‘recapture’ that space and re-tenant it, if we found a replacement for them and gave them a certain amount of notice,” Sidell said. In exchange, it reduced the rent paid by Barnes & Noble. “We gave them enough notice so they could stay during the Christmas season and plan for the most efficient exit,” Sidell said. He said he expects Uniqlo will spend “several hundred dollars” per sf for its tenant improvements. “One benefit to them is that 19,500 square feet of the 27,500 square feet is on the second floor,” as second-floor space is less expensive than ground-floor space on the 16th Street Mall, he said. In addition to Uniqlo, Henry’s Tavern recently opened along the 16th Street Mall in the Pavilions in space where the Virgin Megastore closed six years ago. As far as the Uniqlo store, Sidell said the only downside is that Barnes & Noble is leaving the Pavilions for good. He said he thinks its departure likely will be good news for the Tattered Cover in Lower Downtown. “We asked Barnes & Noble if it wanted to keep a small presence in the Pavilions, but it did not,” he said. “We would have liked them to stay,” he said. “The Pavilions gets quite a bit of tourist and convention business, and I think a small bookstore where they could pick up a book or a magazine would be something they would find useful,” Sidell said.