Risky retail plan finds footing

From the April issue: The notion of a $1 billion retail blockfront on Fifth Avenue seems like a pipe dream from the boom times. But it may yet happen.
The record-setting purchase last month of a slice of the retail space at 666 Fifth Avenue by the parent company of Spanish clothing store Zara looks to be the tonic needed to get the once-wobbly investment by the Carlyle Group, Crown Acquisitions and Kushner Companies into the black. But it has been a turbulent road for the investment trio.
In 2008, buoyed by a top-of-the-market lease from Abercrombie & Fitch, they paid $525 million for an 89,000-square-foot retail condo at the base of the 41-story office tower, located between 52nd and 53rd streets.
Then the market tanked, and the investors couldn’t find another prime retailer for almost two years — leaving them on the hook for more in expenses than they were taking in.
This month The Real Deal takes a behind-the-scenes look at just how much the downturn hurt the investment group in the two years they were unable to find a blockbuster tenant. [more]