Bloomingdale's world-famous flagship store, directly across from Wien & Malkin's Third Avenue retail condo.

"In addition to quickly leasing what little vacant space we've ever had, our tenant roster has become stronger and more creditworthy than ever before," says Fred C. Posniak, vice president of W&M Properties and of Wien & Malkin Supervisory Services. "The secret to our success, besides excellent choices of locations, is proactivity. We closely monitor the performance of our retail tenants to identify any problem in advance and try to turn it into new opportunity. It's the same proactive approach we apply to office properties."

A Durable Strategy

Wien & Malkin identified its first center-city retail condo, which is the retail portion of residential co-ops or condos, in 1993. The criteria applied to such acquisitions have always been stringent: a quality property in a vibrant neighborhood, with excellent access and heavy foot traffic, and surrounded by destination retail and/or entertainment. Each condominium is also in a "crossover" market with office and residential properties. And, of course, the economics must make sense.

"We haven't made a retail condo acquisition in New York City over the past few years because Manhattan's retail property market has been overheated," explains Anthony E. Malkin, president of W&M Properties. "Even today, the Westport market sees properties change hands at prices out of our disciplined reach. But we're watchful for special situations in which W&M Properties' management and marketing skills can add value to a property."

Plans for Redevelopment

Adding value is the motivation behind plans to transform Wien & Malkin's retail condo at Third Avenue and East 60th Street, where over a period of years the individual store leases were carefully structured to expire simultaneously in 2007. Situated directly across from Bloomingdale's flagship store, with major new residential, retail, hotel and office projects nearing completion nearby, the property is destined for a higher-value use when the current leases expire.

The popular J. McLaughlin store, part of Wien & Malkin's investment in Westport, CT.

W&M Properties is now developing plans and marketing materials and intends to start the marketing program first quarter 2005. Details about these plans will be covered in future issues of Real Estate Investor.

In early 2003, Wien & Malkin made a strategic departure from the retail condo niche, when a Wien & Malkin led limited partnership, co-investing with a Malkin family partnership, purchased three adjoining stores in the center of suburban Westport, one of the most affluent communities in the U.S. Occupied by Ann Taylor, The Gap and J. McLaughlin, the stores are under long-term triple-net leases.

"These are part of a charming row of shops in a 'main street' setting that attracts traffic from all over Fairfield County," says Mr. Malkin. "Aside from the fact that there is no subway, the market factors in this location are identical to those in our Manhattan properties."