Jones Lang LaSalle


Toy companies making play
Two tenant groups eye sites to replace old Toy Center; seek 300,000 sq. ft.
By Elisabeth Butler
Published on February 20, 2006

Toy executives were concerned with more than peddling their latest dolls and games at the American International Toy Fair last week. They were also worried about finding a new home for their showrooms in time for the bigger toy fair in October.

Two tenant groups have taken up the search since the Toy Industry Association said it was no longer looking for a new building to replace the old International Toy Center.
"What we don't want is for the entire industry to be spread all over the place," says Andrew Stern, founder of Breakstone-Stern Associates Inc. and a leader of the 200 Fifth Avenue Tenants Association, which was formed about a year ago. "The consensus is we want to stay in New York, but we want to find a home."

The time for making a play is winding down. Toy companies at the International Toy Center have known since October 2004 that they would have to move out of 200 Fifth Ave. and 1107 Broadway because the new owners want to convert the buildings to luxury condos. The likelihood is dwindling that anyone will secure at least 300,000 square feet for as many as 300 showrooms--and get the space ready in time for the next fair.

If a permanent home doesn't surface quickly, companies may start signing their own leases without waiting for the tenant groups to pick a location. Many showroom leases in the International Toy Center have already expired, and other companies are leaving early to take advantage of incentives offered by the new owners.

Last October, TIA announced that it had found a downtown home for the tenants at 100 Church St., but that deal soon fell through after concerns emerged about the building's location and quality. Earlier this month, the TIA gave up its search and told tenants to use brokerage firm Newmark Knight Frank to find their own site.

Newmark broker Moshe Sukenik says that "well north of 50" tenants called him during the toy fair last week and expressed a desire to stay together. He hopes to sign a letter of intent with a landlord in the next few weeks.

"We want to keep this industry in New York," Mr. Sukenik says.
Meanwhile, the two tenant organizations are working with different brokers to find appropriate real estate. The newer group, called New York Toy Tenants, is headed by Steven Greenfield, president of Salo Ventures and a member of the TIA board of directors. The group represents a broad spectrum of companies.

Mr. Stern says that members of the 200 Fifth Avenue group decided not to work with Mr. Greenfield because their organization represents more small- and medium-sized companies, which cannot afford to pay much for showroom space.

Although the ideal site would be one building with enough room to accommodate all the tenants, the industry may end up divided among two or three buildings, Mr. Stern says. Tenants say two addresses are on the short list: 5 Penn Plaza, on Eighth Avenue between West 33rd and West 34th streets; and 1115 Broadway at West 25th Street. Also, 100 Church St., between Barclay Street and Park Place, is said to be back on the negotiating table.

The toy tenants would sign individual leases even if they promise to move into the building as a unit.

Comments? EButler@crain.com