Legal Cannabis Retail in NYC, Shopping While Drinking in Arizona, Realty Income and More

New York State’s First Legal Cannabis Store Opens in Former Gap

Housing Works Cannabis Co. became the state of New York’s first legal cannabis store when it opened on Dec. 29. The 4,400-square-foot space opened last week in a former Gap near Manhattan’s Astor Place. Asking rent was about $200 per square foot per year when the tenant signed its lease.

The state chose Housing Works as one of its first licensees because the nonprofit, which fights AIDS and homelessness, purposefully hires employees who have connections to previous criminal prosecution for illegal marijuana sales. The state’s first legal recreational cannabis stores will be opened by business operators who have cannabis convictions or by nonprofits that serve people affected by the “unequal enforcement of cannabis prohibition.” To qualify, nonprofits need to have at least one board member who as had interactions with the criminal justice system as a defendant and need to create job opportunities for those with marijuana convictions.

The state has issued 36 legal recreational cannabis retail licenses and had said 20 legal cannabis stores would open statewide by year-end 2022. Housing Works Cannabis, represented by Katz & Associates director Sean Philipps, is the only one that has opened. However, the state has hired CBRE to find 150 sites for marijuana stores and to help negotiate leases for operators. The state also will offer design help to entrepreneurs who have been convicted of marijuana-related offenses or whose relatives have been found guilty of crimes connected to marijuana.

ALSO CHECK OUT: What Cannabis Retailers Need to Consider When Opening Physical Stores

Housing Works also operates a chain of charity thrift stores in New York City and expects to see $1 million in pretax sales revenue at the Astor Place store in its first year. The nonprofit also plans to train a new generation of marijuana entrepreneurs, offering them the business experience necessary to open their own licensed shops.

New York state will be the largest new market for legal recreational cannabis in 2023, cannabis retail sales tracker BDSA predicts. The firm said 45% of adult residents surveyed in fall 2022 claimed to have consumed cannabis in the previous six months, a 17% increase over fall 2021. An additional 27% of New York adults indicated they’re likely to consume in the future.

Shoppers Now Can Carry Their Drinks Around in 2 Arizona Marketplaces

An Arizona law that makes it possible for consumers to stroll around shopping centers with cocktails, beer and wine takes effect on Jan. 12. Two properties in the greater Phoenix area, Tempe Marketplace and Desert Ridge Marketplace, have acquired such licenses. Patrons who want to walk with their drinks and have proved they’re over 21 will receive wristbands and specially marked plastic cups. More Arizona retail centers are expected to get licenses this year.

Realty Income Agrees to Buy 185 Single-Tenant Properties for $894 Million

Realty Income will acquire as many 185 single-tenant retail and industrial properties totaling 4.6 million square feet for $894 million. The REIT agreed to buy the properties from subsidiaries of CIM Real Estate Finance Trust, a nonlisted REIT sponsored by an affiliate of CIM Group. Four properties are leased to industrial operators, and 181 are retail, leased to 55 operators like CVS, Hobby Lobby, Kohl’s, Kroger, Lowe’s and Walgreens.

The composition of the portfolio at the time of closing may vary based upon the completion of due diligence and rights of first refusal related to certain properties. The transaction is expected to close in the first quarter. Inclusive of all 185 properties, the transaction is expected to be executed at an approximate 7.1% cap rate for the total portfolio, which has a weighted average remaining lease term of 9.2 years. About 10% of the portfolio is in Texas.

This is Realty Income’s fourth portfolio acquisition from CIM since 2019. Realty Income has 11,700 freestanding commercial properties in its portfolio.

5 Retailers to Watch in 2023

Bloomingdale’s: The department store chain will open its first Seattle outpost this year, a scaled down Bloomie’s, within Ravenna’s University Village. The Bloomie’s will be similar to stores the company opened in Chicago in 2022 and in Fairfax, Virginia, in 2021.

Honeygrow: The Philadelphia-based fast-casual restaurant has more than a dozen locations in the pipeline for 2023. Known for wholesome, simple and made-to-order stir-fry dishes, salads and mixed fruit cups with honey, it recently signed a 2,418-square-foot lease at Kimco Realty’s Mill Station in Owings Mills, Maryland. It’s Honeygrow’s fifth restaurant in the Maryland area. Last year, the firm opened six locations, bringing its total to 31 across seven markets.

Primark: The value clothing retailer moved closer toward its plans to reach 60 U.S. stores by 2026 with the opening of a 49,000-square-foot store at City Point in Brooklyn, New York, last week. It plans to open another nine stores across the country in 2023.

Rally House: In 2023, the sports fan gear retailer plans to add new stores in markets where it already has at least one, including Columbus, Ohio; Pittsburgh, Pennsylvania; and Okemos, Michigan. Rally House operates more than 140 locations across 14 states.

Savage X Fenty: Pop star Rihanna’s Savage X Fenty lingerie brand will open a 3,275-square-foot store this year at Cross County Center in Yonkers, New York. It will move into a former New York & Co. The asking rent was $225 per square foot. Savage X Fenty also has stores in Las Vegas; Houston; Culver City, California; Philadelphia; and Arlington, Virginia.

Pine Tree Names Chief Investment Officer

Pine Tree promoted Conor Bossy from executive vice president and director of acquisitions to chief investment officer. Bossy joined Pine Tree in 2015 and has overseen more than $1.1 billion in shopping center acquisitions totaling nearly 6 million square feet of leasable retail space. Of that total, $450 million have come in the past 13 months.

NAI/Merin Hunter Codman Hires COO

South Florida commercial real estate services and investment firm NAI/Merin Hunter Codman hired Matthew Brown as COO to oversee the brokerage and property management businesses and to work on acquisitions in the Southeast on behalf of the firm’s affiliated MHCommercial Real Estate Funds. Brown has more than 20 years of experience and previously served as chief investment officer for New York City-based Dabby Investments. He also has worked as managing director and capital markets team leader for Colliers, Newmark and The Carlton Group.

Mall Management Expert John Millar Has Died

Distinguished shopping center executive and ICSC volunteer John Millar has died at the age of 78. Millar launched his career at Jordan Marsh department stores and moved into commercial real estate in 1980 at Goodman Segar Hogan in Norfolk, Virginia. He went on to work at General Growth Properties as vice president of mall management for 12 years before holding executive vice president positions at Jones Lang LaSalle Retail in Atlanta and Divaris Real Estate in Virginia Beach, Virginia. He also had served as CEO of his own firm, Trusted Real Estate Advisors, since December 2013.