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Related markets retail space for office use

With Neiman Marcus in bankruptcy, Related and Oxford Properties are marketing the department store’s space at the Hudson Yards mall to office tenants. In total, the developers put 380,000 square feet — or roughly 40 percent of the shopping complex — on the market, Business Insider reported.

  • Why it matters: Related and Oxford spent $80 million building out the 188,000-square-foot store for Neiman, which they used as an anchor to lure other retail tenants. The developers receive five percent of sales in lieu of rent for the initial three years, and eight percent in the following two years. The brand was considered such a significant selling point that several other stores in the mall reached agreements in their leases that allow for rent discounts or exits if Neiman vacates and no equal replacement is found. 
  • Be Smart: The developers could also be seeking to head off negotiating leverage that Neiman could hold during the bankruptcy process to renegotiate its already-attractive lease at the Hudson Yards. [BI]

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