The Real Deal New York

Qatari luxury shop looking to sublease space on Madison

"Gold Coast" store sits empty after Qela signed pricey lease last year

September 03, 2015 02:20PM
By Rich Bockmann

Sheikha Mozah bint Nasser Al Missned of Qatar, Richard Hodos and a rendering of 680 Madison Avenue

Sheikha Mozah bint Nasser Al Missned of Qatar, Richard Hodos and a rendering of 680 Madison Avenue

Qatari fashion brand Qela’s retail store on the Upper East Side’s “Gold Coast” remains empty more than a year after it inked a deal that cost an arm, a leg and a few diamond-encrusted handbags. And now the haute couture company is quietly shopping around a sublease for the space.

The Qatar Luxury Group, a subsidiary of the Qatari ruling family’s nonprofit arm, launched the high-end fashion brand Qela back in 2013, with hopes of placing Qela in the pantheon of Hermes, Dior and Dolce & Gabbana.

The design firm signed a lease early last year for 6,200 square feet across two levels of Thor Equities’ 680 Madison Avenue, the former Helmsley Carlton Hotel.

Quela paid about $2,000 per square foot for the ground-floor space, making the deal one of the most expensive leases of the year.

The transaction earned the high-end retailer’s broker, CBRE vice chairman Richard Hodos, a nomination for the Real Estate Board of New York’s Most Ingenious Deal of the Year Award.

While Qela successfully opened its doors in Doha, Qatar, the store on Madison Avenue sits empty, and now Hodos is shopping the space around on the sublease market, sources told The Real Deal. A spokesperson for CBRE declined to comment.

As with most of the city’s premier shopping districts, retail rents on Upper Madison Avenue have climbed terrifically over the past several years. But that growth appeared to cool a bit over the past year, with asking rents between 57th Street and 72nd Street growing a modest 3 percent on the year, to an average of $1,700 per square foot, according to REBNY’s spring retail report.

After the Qela deal, Thor signed eyewear-designer Morgenthal Frederics to a 650-square-foot boutique shop and the suit-maker Brioni to 7,000 square feet.

Joe Sitt’s company purchased the retail condo stretching the full block on Madison between East 61st and East 62nd streets for $277 million in 2013, which was one of the highest prices ever paid for retail on the shopping strip.