The Real Deal New York

Borders discounts Park Avenue lease with goal to shutter store

September 21, 2009 06:18PM
By Adam Pincus

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The national book retailer Borders has slashed by 18 percent the price to sublease the space it rents in a commercial cooperative space that developer Cohen Brothers Realty purchased this month in the Ritz Tower in Midtown.  

Last year Borders offered to sublease four floors of retail space it is renting in the tower at 465 Park Avenue at 57th Street, for $4.3 million, sources said, in anticipation of closing the store.

Now, Borders is asking $3.5 million per year for the site, according to Robin Abrams, executive vice president of Lansco, which has been marketing the lease in coordination with DJM Realty of Long Island since June.

Abrams did not disclose what rent Borders is paying for its lease, which covers the lower, ground, second and third floors. The retailer declined to comment.  
 
“I would say we are exploring our options. There is serious interest from a couple of different types of users,” she said, who are looking to lease the entire space.   
 
Borders first signed the lease in 1997 and it runs until 2018, data from research company CoStar Group shows. Insiders said the book retailer was reviewing locations and considering which ones to close. 

“We are continuing to explore our options with this particular location,” said Mary Davis, a spokesperson for Borders.
 
DJM Realty, a division of Gordon Brothers Group, specializes in marketing unwanted assets, according to its Web site.  
 
Cohen Brothers, which owns commercial buildings in Manhattan, Florida, Texas and California, closed on the purchase of the Borders retail co-op space for $22 million from Shorenstein Properties Sept. 3, after going into contract in May, city property records published Friday say.
 
The company’s president, Charles Cohen, was traveling and unavailable for comment.  
 
The reduction in sublease price was a reflection of the decline in the market generally, Faith Hope Consolo, chairman of retail leasing and sales at Prudential Douglas Elliman, said. She is not involved in marketing the property.
 
“They are making an adjustment to… what they feel today’s market will bear,” Consolo speculated, adding, “They are trying to make it attractive to dump the lease.”
 
Consolo suggested Borders could get as much as $5 million per year in rent if it would subdivide the space into two or more locations and put in a high-end retailer like Brooks Brothers to anchor the corner.
 
“What you put on this corner is the key to bringing luxury retailers east to Lexington [Avenue],” she said.

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