NEW YORK CITY—Vornado Realty Trust said Thursday afternoon it had signed online retailer Amazon to a 17-year lease for 470,000 square feet at the office and retail REIT's 7 W. 34th St., near Herald Square. The lease accounts for all 12 floors of the property, according to industry data.
VNO did not state how the space would be apportioned. However, published reports since early October have suggested that Amazon would use its berth in the Penn Plaza district for its first retail store and for distribution space.
When reports first surfaced that Amazon was coming to 34th Street, GlobeSt.com cited a report from Paul Morgan, research analyst at MLV & Co., stating that if Amazon were to replicate the space in other cities, it would make the company a master of omni-channel selling and would verify the value of the retail sector.
“While details were not published regarding the lease-term and the strategy (same-day pick-up vs. retail-orientation, for example), should Amazon view the branding and same-day convenience benefits of retail stores as significant enough to roll out more in the future, the omni-channel retail spectrum would essentially be complete,” Morgan wrote. This would “assuage investors concerns about long-run shopping center demand and reemphasize the centrality and stability of bricks-and-mortar retail and retail REIT portfolios.”
Opening a physical location is “about marketing the Amazon brand,” Matt Nemer, a Wells Fargo analyst, told the Wall Street Journal in early October. “Same-day delivery, ordering online and picking up in store are ideas that are really catching on. Amazon needs to be at the center of that.”
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
