The Real Deal New York

Vornado, Crown buy out De Beers’ lease at St. Regis Hotel for $20M

Swiss watchmaker Swatch is set to take the space over
By Ariel Stulberg | March 30, 2016 03:26PM

The St. Regis Hotel at 2 East 55th Street in Midtown (inset: Crown's Stanley Chera and Vornado's Steven Roth)

The St. Regis Hotel at 2 East 55th Street in Midtown (credit: Google Street View) (inset: Crown’s Stanley Chera and Vornado’s Steven Roth)

Diamonds may be forever, but Manhattan leases are not.

De Beers is quitting its space at Vornado Realty Trust and Crown Acquisitions’ commercial condominium at the base of the St. Regis Hotel, and the landlords seem willing to help the jewelry brand out the door to make way for a Swiss watchmaker.

Vornado and Crown paid De Beers $20 million to close out its 15-year, 7,900-square-foot lease at 2 East 55th Street, which was due to expire in 2019, according to public records.

The jeweler is moving later this year to a new flagship location at 716 Madison Avenue on the Upper East Side. It will operate temporarily at 777 Madison Avenue until then.

“Fifth Avenue has considerably changed over the last ten years, and it was the right time for us to find a new home for our precious brand,” De Beers’ François Delage told WWD in January.

Swatch, the Swiss watchmaker, signed a lease in May of last year to take the entire 24,800-square-foot space – the St. Regis space, plus the five-story townhouse at 697 Sixth Avenue next door – that Vornado and Crown bought for $700 million back in 2014.

Swatch’s asking rent is unknown, and it’s not clear why the landlords decided to move before the lease expired.

The landlords recently accepted $450 million in financing for the purchase in December.

Vornado declined to comment for this story. Crown, De Beers and Swatch didn’t immediately return a request.