Monday, February 13, 2006

High Point far from throwing in towel

High Point far from throwing in towel
Major investor cites cost as definitive difference between N.C. and Las VegasBY VALERIE MILLERBUSINESS PRESS Furniture showroom real estate values in High Point, N.C., have been holding their own under the pressure of the Las Vegas Market, and one big-name investor in the North Carolina furniture market is even firing back and raising questions about the dollar-and-cents viability of the World Market Center.Chris Kennedy, the president of the Chicago-based Merchandise Mart and the son of the late Robert F. Kennedy, said he's not worried about his company's approximate $200 million investment in High Point furniture showcase buildings. He explained his company, Vornado Realty Trust, had considered Las Vegas as a site for a furniture show years ago but decided against the idea. "Vegas has turned into one of the most expensive markets in the country," said Kennedy. "You can't fill those eight (planned) buildings with what it costs to build them. Otherwise, we would have built out there if we had thought so."High Point's showcase buildings will remain attractive to furniture manufacturers because of the relatively cheap costs to exhibit in the North Carolina town -- $10 per square foot vs. $35-$40 a square foot in Las Vegas. "That doesn't seem like a good deal, does it?" said Kennedy. "Las Vegas and High Point will co-exist, but I think Las Vegas will stay a regional market. There has always been a western regional market and that's what it will be. It was built on the ashes of San Francisco."

Collezione Europa Warehouse is up for sale in High Point Furniture District.

NO LEASING PROBLEMSKennedy's Vornado Realty Trust, one of the largest investor-owners in the North Carolina market, owns six buildings in High Point: Market Square, the Suites at Market Square, Plaza Suites, Furniture Plaza, Hamilton Market and the National Furniture Mart. Kennedy said his company isn't having a problem leasing out space and dismissed talk by exhibitors during the Las Vegas show about rampant "For Sale" signs springing up. "I think people are paying more attention to them now," he maintained.Exhibitors at the Las Vegas Market have been eyeing the state of High Point's showcases, trying to see who was fleeing for Las Vegas. One said a company representative had visited High Point before the January World Market Center show and "never saw so many 'For Sale' signs up."188 BUILDINGS USEDHigh Point Realtors backed up Kennedy's contention that the state of the real estate market is still good. "There are about 80 showrooms here, and some of the smaller ones are for sale," said Harold Johnson of Craven Johnson and Pollock. However, public listings wouldn't tell the tale anyway, the realtor noted, because most of the time potential buyers contact a realtor to seek out sellers privately. There are 188 buildings used for the twice-a-year market, according to the High Point International Home Furnishings Market Authority's Web site.The last major expansion of High Point showroom buildings was about four years ago, Johnson said, adding there hasn't been much built since then. "I thought another expansion would happen by now, but there is a pretty good equilibrium in High Point between the demand and the space available."Kennedy said Las Vegas market organizers should be the ones thinking about losing furniture exhibitors. "What are they going to do when those three-year leases expire?" Kennedy asked. "Take those buildings and put apparel into them? Put the MAGIC convention there? That space in Vegas would also be great for condos." 702-871-6780 x331