When Tiffany & Co. sought to implement a multi-million-dollar renovation of its flagship store on Collins Street in Melbourne, Australia, it turned to CBRE to navigate the transition. “Tiffany is an extremely sought-after brand here, so our stores are very busy,” said Glen Schlehuber, Tiffany managing director, Australia. “We were seven years into a 10-year lease, and the store was becoming overcrowded and difficult for customers to navigate. Our ability to provide the Tiffany Experience was fast becoming a challenge. We needed to take action and at that point we determined we needed to more than double the size of the store.”
The CBRE team in Australia, led by regional director Joshua Loudoun, had been introduced to Tiffany through Annette Healey and Paul Muratore from CBRE New York. “Following a detailed brief from Tiffany & Co. we were able to assist in terminating the existing lease and renegotiating a new 10-year lease agreement that would support the significant capital investment Tiffany’s was proposing. CBRE’s proprietary knowledge of upcoming supply and forecasts on lease expirations enabled us to have a constructive dialogue with prospective landlords,” said Loudoun.
Armed with this information, Tiffany decided that the fastest and most efficient way to complete the project was to move out during construction. Tiffany turned to CBRE to secure temporary premises on Collins Street — no easy task given the popularity of the location, and Tiffany’s requirement for a space that would maintain its world-class brand image with customers. “We needed a space similar in size, close to the existing store so customers could find us, and cost-effective, because we would be paying double rent for the duration of the project,” said Schlehuber. “It really was not an easy assignment to fill given the lack of space on Collins Street, and the fact that few landlords are willing to enter into short-term leases.”
With the assistance of its asset management team, CBRE identified a suitable property in terms of location, size and presence, whose landlord was motivated to do an 18-month lease while in the planning and approval process on an upcoming renovation project. “Given their local knowledge, expertise and market connections, CBRE was able to find short-term space that delivered on all three of our requirements, so we were pretty excited about that,” said Schlehuber.
Tiffany wasn’t able to move in immediately, but rather than lose the opportunity, CBRE found a book retailer to sublease the space for a short-term period and minimize Tiffany’s cost. When Tiffany needed to extend the temporary lease at the end of the period, CBRE successfully negotiated that as well. “We were proactive and flexible in our approach, understanding what Tiffany was trying to achieve and identifying potential problems before they came up in order to meet the client’s expectations,” said Loudoun.
“I don’t think it could have worked out more perfectly for us,” said Schlehuber. “Customers were able to easily find us during the renovation, and sales never skipped a beat. That was huge given the importance of the store and volume of business we do there. CBRE obtained a reasonable rent that was fair for the landlord that owned the space and for us. They came through for us in a tough scenario, and totally exceeded our expectations.”