The Real Deal New York

Manhattan’s 10 most expensive retail leases of 2014

December 23, 2014 07:57AM
By Adam Pincus

From left: 677 Fifth Avenue and Microsoft CEO Satya Nadella

From left: 677 Fifth Avenue and Microsoft CEO Satya Nadella

UPDATED, 9:25 a.m., Dec. 23: Microsoft’s retail lease taking several floors at 677 Fifth Avenue was the most expensive store deal signed in 2014, ranked by estimated annual rent, a survey by The Real Deal found.

The computer hardware and software firm is paying an estimated $17 million at 677 Fifth Avenue, a seven-story building located between 53rd and 54th, owned by Kingsville Investments, several sources said.

“The Microsoft store at Fifth Avenue will be much more than a standard retail store and in addition to retail, there will be experiential space for Microsoft as a company to further engage with our customers and partners in new ways,” a spokesperson for the Redmond, Washington, the tech firm said in a statement to TRD. The company declined to comment on the rent figure.

RankTenantLandlord Estimated rentAddressSize (sq ft)Tenant brokerLandlord broker
1Microsoft Kingsville Investment $17 million 677 Fifth Avenue 20,600CBRE's Richard HodosCushman & Wakefield's Andrew Kahn, Jesse Hutcher, Jonathan Scibbilia
2TopshopVornado Realty Trust $15 million608 Fifth Avenue45,000Direct Vornado's Sherri White
3Restoration HardwareAurora Capital Associates, William Gottlieb Real Estate$9 million9-19 Ninth Avenue 70,000Open Realty Advisors’ Mark MasinterAurora's Jared Epstein
4Bottega VenetaWildenstein family's 740 Madison SPE $8 million740 Madison Avenue24,000Cushman & Wakefield's James Downey, Eric Le GoffCushman & Wakefield's John Gray, Frank Liantonio; David Wildenstein representing the family
5NBAMoinian Group$7.5 million545 Fifth Avenue24,000Newmark Grubb Knight Frank's Jeffrey Roseman and Moshe Sukenik Winick Realty Group's Jeff Winick
6Skechers USA SL Green Realty$7 million1515 Broadway3,519Cushman & Wakefield's Gene Spiegelman, Alisa AmsterdamNewmark Grubb Knight Frank's Jeffrey Roseman, Marc Leber
7QelaThor Equities$6 million680 Madison Avenue6,230CBRE's Richard HodosThor Equities
8SamsungThor Equities, Taconic Investment Partners$5.6 million837 Washington Street17,500 UnclearThor Equities' Alexandra Frangos
9Whole Foods Equity Office $5.3 million1095 Sixth Avenue 32,000SCG Retail's Chase Welles, Jacqueline KlingerSRS Real Estate Partners' Patrick Smith
10ZaraL&L Holding, Beacon Capital$5.2 million222 Broadway30,000Direct Cushman & Wakefield’s Bradley Mendelson, Alan Schmerzler, Steven Soutendijk
Source: The Real Deal reached out to more than a dozen industry sources to determine the estimated rents. We also reached out to the landlords and tenants or their representatives. None commented on the record.

The rent survey included new leases only and did not include department store deals. The survey relied on industry sources, and there were often insiders providing conflicting information. TRD reached out to the landlords and tenants as well as their leasing representatives, and in no instance did anyone provide a figure for attribution.

Financial information is tightly guarded and comparable leases — known in the trade as “comps” — are shared among brokers sparingly. Since no one spoke on the record, we are considering these figures as estimates. Often sources provided different figures. Some insiders estimated, for example, that the rent Microsoft is paying is $16 million while other pegged it closer to $17.5 million, so our analysis settled on $17 million.

Following that was the clothing store Topshop, taking 45,000 square feet at 608 Fifth Avenue, at the corner of 49th Street, paying an estimated rent of $15 million.

The next most expensive leases were Bottega Venata paying about $8 million per year for space at 740 Madison Avenue, Restoration Hardware’s deal at 9-19 Ninth Avenue, for $9 million, the NBA taking space at 545 Fifth Avenue for $7.5 million and shoe retailer Skechers USA  inking at deal at SL Green Realty’s 1515 Broadway for $7 million per year.

Despite the concentration of the most valuable retail along Upper Fifth Avenue and Times Square, the top 10 most expensive leases were signed in a wide variety of retail shopping districts. They ranged from Zara’s lease at 222 Broadway in Lower Manhattan up to Lowe’s Home Improvement at 2008 Broadway, at 68th Street.

Correction: A previous version of this article had an incorrect number of square feet for the Bottega Veneta lease, and was missing the landlord agents on that deal.

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