Rendering of Ethan Allen's multi-level flagship Manhattan store at 1010 Third Avenue, which will replace the small stores and offices now occupying the site.

The 1998 acquisition of a retail condominium on Manhattan's East Side, next to Bloomingdale's, was not a quick financial success for Wien & Malkin investors. Distributions did not begin immediately, and the lease up of long- vacant space was only accomplished after moving a 60th Street bus stop to the opposite side of Third Avenue.

However, the longer-term strategy of the acquisition was to reset all leases at 1010 Third Avenue to expire at once so that the entire garage, retail, and office property could be leased as one large block of retail in 2007.

That long-term vision has become a reality, as we announce that Ethan Allen, the nation's largest retailer of fine furniture and home furnishings, will open its new multi-level, flagship Manhattan store at 1010 Third Avenue, replacing the small stores and offices that now comprise most of the property. The tenant has signed a long-term lease, and W&M's successful effort to secure zoning variances to allow a use change for the property has now made that lease effective.

"Our primary thought in acquiring this retail condo, right next to Bloomingdale's, was our conviction that the property was under-utilized and represented a spectacular opportunity for value enhancement," says Anthony E. Malkin, President of W&M Properties. "We knew that its irreplaceable location next to one of the world's best-known stores, combined with a swelling momentum for residential development in this high-energy neighborhood, would open the door to higher and better use for our property."

With this anticipation, Fred C. Posniak, W&M's Senior Vice President, structured the leases for all tenants to end simultaneously in the summer of 2007, and then, two years in advance of the restructured lease expirations, established a timetable to conduct market feasibility studies, prepare architectural and engineering plans, and begin the actual marketing.

"The studies we conducted identified big-box retail and satellite medical facilities as the most likely uses for this property," he explains. "We then commissioned architectural plans that would efficiently accommodate both types of users, which enabled us to diligently pursue the most promising opportunities in either category."

Adds Mr. Posniak: "It shouldn't surprise anyone to learn that a number of prominent retailers sought a footprint in a thriving neighborhood that houses Bloomingdale's flagship store, the Bloomberg News world headquarters, and dozens of other nationally-known retailers, such as Gap, Pottery Barn, Home Depot, and Banana Republic. Considering visibility, access and traffic density, this is without question one of the most desirable redevelopment opportunities in Manhattan."

Ethan Allen, which has more than 300 stores around the nation and in nine other countries, plans to open at its Third Avenue location early in 2008. The store will occupy 36,700 square feet on the ground, second and third floors, as well as a portion of the retail condo's basement level.

Green Mountains Legacy

Ethan Allen had more than a billion dollars in sales last year, with high profitability and a strong balance sheet. Although headquartered today in Danbury, Conn., the company was founded in Vermont in 1932, and derives its name from the colorful Revolutionary War-era figure associated with Vermont's legendary Green Mountain Boys.

Mr. Posniak notes that a new lease has also been secured for the underground parking facility at 1010 Third Avenue.

The retail condo at 1010 Third Avenue is one of several choice Manhattan retail properties in destination neighborhoods that were acquired for Wien & Malkin investors within the last 10 years, when retail property values were just beginning a sharp upswing.