CHICAGO – NeoCon, the contract furniture industry’s annual trade show, will continue to be held at The Merchandise Mart for years to come in spite of “wildly outrageous rumors” to the contrary, according to Mark Falanga, president of Merchandise Mart Properties Inc. (MMPI).
Speaking at the annual breakfast meeting of the Business and Institutional Furniture Manufacturers Association (BIFMA) on Wednesday, Falanga rattled off some of the rumors. “I heard that The Mart was converting to office, that Kraft Foods was moving into The Mart, that we were eliminating the 7th and 8th floor market suites and that this year or next would be the last NeoCon at The Mart. Today, I’m here to set the record straight and tell you that there is absolutely no truth to any of these outlandish statements.”
Falanga said it would not make fiscal sense for MMPI, which was purchased by Vornado Realty Trust from the Kennedy family in 1998, to make any changes that would lead to the elimination of NeoCon at the Mart.
“No rational owner, including Vornado, would consider anything but to move into the future with the contract industry leading the way and that is why we have renewed 120,000 square feet of contract showrooms this year and have leases with each of the eight major manufacturers, totaling another 237,000 square feet, going out from four to eleven years into the future,” Falanga said. He added that the Mart produces 20 shows per year, including NeoCon and the International Casual Furniture & Accessories Market. The 7th and 8th floors used for temporary exhibits for those shows “drive the equivalent of 20 years of rent” and consequently would be “the last two floors we would ever take out of commission.”
The 4.2-million-square-foot Merchandise Mart opened in 1930. Since the 1950s, Falanga said 25 to 40 percent of the Mart’s space has been leased for corporate offices. Current corporate tenants include WPP, Razorfish and the Chicago School of Professional Psychology. Falanga noted the Mart is in the process of relocating about 150 residential furniture, casual furniture and giftware showrooms that will free up some space for new corporate tenants. He added, however, that corporate spaces command a lower rent than showrooms, yet another reason why the Mart would not want to do anything to lose its contract furniture tenants. “Resulting from this process will be a block of vacant space, in the upper floors of the building, which we will lease, probably for office, because there is no demand now from our showroom tenants for additional space.”
“Our plans are to produce NeoCon indefinitely and we have announced dates for NeoCon’s next twelve years at The Merchandise Mart in Chicago to give you the comfort that NeoCon will be here forever,” Falanga added. “We are not eliminating NeoCon and would be out of our minds to even consider such a thing. The show is defining of what The Mart stands for, accounts for 20% of our profits and has a bright future.”
Falanga stressed that while Vornado has made it known that some of its assets, including Canada’s annual IIDEX NeoCon, are available for sale, the Mart and NeoCon are not for sale and our plans are to produce NeoCon, with the 7th and 8th floor market suites forever.”
Falanga said he will to work closely with a new advisory group made up of of BIFMA representatives “that will provide us with your input on our marketing efforts, educational programming, Mart technology deliverables and our attendee base. We are working to form this group soon so that its impact will be felt beginning NeoCon 2013.”
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