UPDATED, 11:30 a.m., Dec. 28: The Manhattan retail market had a rough-and-tumble 2016, but still emerged with some pricey deals, particularly along Upper Fifth Avenue.
Six of the top 10 most valuable retail leases were signed on Fifth Avenue, according to a review of data by The Real Deal. And the top two were both sporting brands.
TRD ranked the most valuable leases signed in 2016, measured by the first year’s rent payment. Many of these deals come with a degree of financial engineering, trading off items like cash paid to tenants to help build out their spaces or a slice of sales that go to the landlord, which in turn affect the face value of the deal.
(And there are certainly property owners who have a vested interest in pushing up that face value as high as they can.) The total value of Manhattan’s top deals this year was, however, down from last year’s ranking.
These are the pricey leases that made the list:
|Most valuable Manhattan retail leases of 2016|
|Rank||Address||Estimated annual rent||Tenant||Sq. ft.||Landlord||Landlord agent||Tenant agent|
|1||650 Fifth Avenue||$35 million||Nike||60,000||Jeff Sutton, SL Green Realty||Jeff Sutton||Cushman & Wakefield's Joanne Podell|
|2||767 Fifth Avenue||$30 million||Under Armour||53,000||Boston Properties||Cushman & Wakefield’s David Green and Steven Soutendjik||RKF's Robert Cohen and Mason Retail Group's Jeff Mason|
|3||685 Fifth Avenue||$20 million||Coach||24,594||Thor Equities, General Growth Properties||Thor Equities, General Growth Properties||none|
|4||3 Columbus Circle||$13.5 million||Nordstrom||47,000||SL Green Realty, Moinian Group||Winick Realty's Jeff Winick, Kelly Gedinsky||JLL's Derek Trulson, Stephen Stephanou of Crown Retail|
|5||645 Fifth Avenue||$10 million||Longchamp||10,000||Crown Acquisitions||Crown Retail Services||Crown Retail Services|
|6||701 Seventh Avenue||$9 million||Hershey||6,900||Witkoff Group||Witkoff Group's Sherri White||CBRE’s George Maragos and Avison Young's Jedd Nero|
|7||75 Rockefeller Plaza||$8.5 million||American Girl||43,179||RXR Realty||Cushman & Wakefield's Gene Spiegelman and Michael O'Neill||CBRE's Susan Kurland (Kurland is now at Savills Studley)|
|8||640 Fifth Avenue||$8 million||Dyson||3,167||Vornado Realty Trust||Vornado Realty Trust's Ed Hogan and Mitchell Dearman||Thor Retail Advisors' Matthew Seigel and Robert Heicklen|
|9||701 Seventh Avenue||$8 million||National Football League||25,000||Witkoff Group||CBRE's Andrew Goldberg and Matt Chmielecki||Cushman & Wakefield's Kenji Oda and Eva Santiago|
|10||730 Fifth Avenue||$7.5 million||Ermenegildo Zegna||9,000||Jeff Sutton, General Growth Properties||Jeff Sutton||Ermenegildo Zegna|
|Source: The Real Deal's reporting, plus information from CoStar Group.|
1) Nike, 650 Fifth Avenue: $35 million
The world’s largest athletic-apparel retailer should know better than anyone that not all races are sprints; some are marathons.
For years, Nike had looked checked out locations to open a Fifth Avenue store, and 2016 was the year that the company finally crossed the finish line.
In late November, the company finalized a deal to lease more than 60,000 square feet at Jeff Sutton and SL Green Realty’s 650 Fifth Avenue. And with an annual starting rent of approximately $35 million, it’s one of the most expensive retail deals ever inked in Manhattan.
The lease was a long time coming. Nike had been looking to get out of its 57th Street space since at least 2013, when it came close to taking H&M’s space at 640 Fifth Avenue. (Victoria’s Secret ended up leasing the location last year, in one of 2015’s priciest deals.)
And earlier this year, Nike was in late-stage talks to relocate to the former FAO Schwarz space at the base of the General Motors Building, but was edged out by swift-moving competitor Under Armour.
2) Under Armour, 767 Fifth Avenue: $30 million
Speaking of Nike’s Baltimore-based competitor, Under Armour scored one of the city’s most iconic retail spaces when it took over FAO Schwarz’s 53,000 square feet at the base of Boston Properties’ GM Building.
The deal not only earned Under Armour CEO Kevin Plank a gig as the keynote speaker at the International Council of Shopping Centers’ New York expo in December, but also boosted the company into the big leagues of Manhattan retail.
Under Armour will pay a whopping $30 million in the first year of its lease.
3) Coach, 685 Fifth Avenue: $20 million
Coach inked a pricy deal at Thor Equites and General Growth Properties’ 685 Fifth Avenue, offering a window into the luxury-accessories retailer’s overall real estate strategy.
Coach has in recent years been shrinking its footprint amid a strategy that focuses on fewer, more high-profile locations.
The company signed a lease for nearly 25,000 square feet on Fifth Avenue, but sources said part of the negotiations included provisions that allowed Coach to close stores at GGP-owned malls. That probably helped push up the $4,000 per-square-foot figure the retailer paid in the deal.
Thor and GGP have been in contract since the spring to sell the office portion of the building for $160 million to Turkish firm Gulaylar Group, which is planning a hotel conversion.
4) Nordstrom, 3 Columbus Circle, $13.5 million
The Seattle-based department store had been rumored to be eyeing the Moinian Group and SL Green’s 3 Columbus Circle for one of its discount Nordstrom Rack stores. But when it inked a 47,000-square-foot lease earlier this year, the company announced the new location would be a standalone men’s shop.
The new store will be just one block away from Nordstrom’s 400,000-square-foot, seven-level department store at Extell Development’s Central Park Tower on Billionaires’ Row.
5) Longchamp, 645 Fifth Avenue, $10 million
French luxury leather retailer Longchamp inked a deal this year to relocate from Rockefeller Center’s the Channel Gardens to a spot with frontage on Fifth Avenue.
The company signed a lease a little more than a block north at Crown Acquisitions’ Olympic Tower at 645 Fifth Avenue, at the corner of 51st Street.
6) Hershey, 701 Seventh Avenue: $9 million
Hershey inked one of the few Top 10 deals this year in a location other than Fifth Avenue.
The chocolatier struck a deal to relocate its Times Square flagship when it leased 6,940 square feet on the ground floor of the Witkoff-led development of the Edition hotel, also known as 20 Times Square.
The deal came with roughly 3,100 square feet of external signage.
7) American Girl, 75 Rockefeller Plaza: $8.5 million
8) Dyson, 640 Fifth Avenue: $8 million (tie)
It may not be haute couture, but Dyson now has its place among Fifth Avenue’s glitterati.
The company, best known for its bagless vacuum cleaners, signed a lease for 3,167 square feet on the ground floor at Vornado Realty Trust’s 640 Fifth Avenue.
9) National Football League/Cirque du Soleil, 701 Seventh Avenue: $8 million (tie)
In another big-time deal for Witkoff, the NFL signed a lease for 25,000 square feet at 20 Times Square.
10) Ermenegildo Zegna, 730 Fifth Avenue: $7.5 million
The luxury Italian clothier Ermenegildo Zegna raised spirits on Fifth Avenue when it inked an expensive deal at Sutton and GGP’s Crown Building early in the year.
In March, the company signed a 15-year lease to take 9,000 square feet at the 400,000-square-foot Midtown tower, located at the corner of 57th Street.
The company’s CEO, Ermenegildo “Gildo” Zegna, negotiated the deal personally with Sutton, the New York Post had reported.
Correction: A previous version of this post erroneously omitted Nordstrom’s lease at 3 Columbus Circle.