REAL ESTATE
Raymour & Flanigan, Tenant & Landlord
The Northeast’s largest furniture chain owns and operates two-thirds of the centers in which its showrooms reside. By Al Urbanski
A Raymour-owned center on Rte. 1 in North Brunswick, N.J.
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t was the 1970s when brothers Bernard and Arnold Goldberg, who had successfully run a furniture store in downtown Syracuse, N.Y., for 25 years, decided to expand. They bought two properties in the suburbs and built two new stores. Today that retailer, Raymour & Flanigan, has 143 showrooms, outlets, and clearance centers scattered throughout the Northeast. Some 50 locations are leased from retail real estate developers like Kimco, Federal Realty, Acadia Realty Trust, and Urban Edge. Raymour is the landlord at the rest. The Liverpool, N.Y.-based company’s retail real estate portfolio totals gross leasing area of more than 15 million sq. ft. and continues to grow under the leadership of CEO Neil Goldberg, Bernard’s son. In the first quarter of 2023, the company expects to close on a major acquisition in Staten Island as well as complete leases for two additional new store locations. “We continue to look for locations with the best financial terms we can negotiate, whether that be leasing from a landlord or through an acquisition,” said Scott CHAINSTOREAGE.COM
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Milnamow, Raymour’s senior VP of real estate development. “We have a first-rate real estate operation that manages our properties, coupled with an exceptional brand in Raymour & Flanigan Furniture.” As both a tenant and a landlord, Raymour holds a rare position in the retail world. Rents collected from the likes of CVS, Starbucks, Barnes & Noble, Aldi, Michael’s, and Burlington give the company a financial hedge not enjoyed by many retailers. Its real estate revenue is tallied separately from the company’s estimated annual $2 billion in furniture sales. Because most households make furniture purchases once every five years, Raymour’s average 50,000-sq.-ft. showrooms require just 30 or so parking spaces, giving the company room to add outparcels to the properties it purchases. For an outparcel it created at a center it owns in Hamburg, N.Y., it had three national tenants bidding for it. Raymour went with Chick-fil-A. “We have an advantage over other center owners in that we have a 50,000-sq.-ft. furniture store anchor that’s not going
anywhere,” Milnamow said. At a center it owns in DeWitt, N.Y., Raymour secured a choice traffic-building tenant with a maneuver few other retail real estate developers would ever be able to employ. “Trader Joe’s was looking for a good location in that market and we knew the advantage of the number of trips the tenant would bring to the shopping center,” Milnamow said. “So we downsized our Raymour & Flanigan showroom by 12,000 sq. ft. and put them in it. That meant fewer SKUs for us in our store, but since Trader Joe’s opened up that parking lot is constantly filled.” Raymour’s real estate business has a construction unit to rejigger its centers in such ways, but most of the of the centers it owns are acquired, not developed, by the company. Its real estate business model is focused on driving its core furniture business — and driving ancillary revenue. But in a time when not much new construction of open-air centers is underway, buying centers proves an adroit strategy for a retailer to put new centers exactly where it wants them. “You go to New Jersey, New York,
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