The Real Deal New York

Vornado dresses up Times Square space with new Sephora lease

Cosmetics retailer inks 18K sf deal at 1535 Broadway
By Rich Bockmann and Mark Maurer | July 21, 2017 03:00PM

1535 Broadway in Times Square

Makeup and beauty giant Sephora is moving its Times Square store across the “bow tie,” where it has put the finishing touches on a lease at Vornado Realty Trust’s 1535 Broadway, sources told The Real Deal.

Sephora signed a lease for roughly 6,000 square feet on the ground floor and another 12,000 square feet on the lower level of the retail portion at the base of the 49-story Marriott Marquis hotel, sources said. Vornado controls 45,000 square feet of retail under a 20-year lease it signed with Maryland-based Host Hotels in 2012 for $213.2 million.

Representatives for Vornado and Sephora did not respond to requests for comment. Virginia Pittarelli at Crown Retail Services, who negotiated the deal on behalf of Sephora, declined to comment.

The financial details of the deal were not immediately clear. Average asking rents for ground floor space on the Times Square “bow tie” – the area on Broadway and Seventh Avenue between West 42nd and West 47th streets – is $1,930 per square foot, according to the Real Estate Board of New York’s spring retail report, representing an 18 percent decline from a year earlier.

In 2015, Vornado signed T-Mobile to 4,000 square feet on the ground floor of the building with a starting rent of roughly $2,000 per square foot, or about $8 million. The cellphone retailer then inked a deal to take LED signage above the store for another $5 million. That deal was soon followed by the Israeli bath-and-body shop Laline, which signed on for 640 square feet.

It wasn’t clear if the Sephora deal included LED signage. The Marriott is just one of 15 properties across the city with a tax assessment of $1 billion or more.

Sephora will relocate its Times Square store at the Tamares Group’s 1500 Broadway, where it’s on a sublease with the Walt Disney Company that expires in a little more than two years, a source told TRD.

The cosmetics chain has another location nearby at RXR Realty and David Werner’s 5 Times square at 200 West 42nd Street, which sources said it plans to keep in place.

As of April, Sephora was in talks to lease a sizable space at Harry Macklowe’s One Wall Street office-to-residential condominium conversion, and in February was in talks with RedSky Capital to open a store at its 241 Bedford Avenue in Williamsburg.