The Real Deal New York

Ashkenazy gets go-ahead to double the rent at Barneys’ Madison Avenue flagship

An arbitrator approved Ashkenazy charging the retailer $30M in rent, a significant hike from the previous $16M
August 12, 2018 12:31PM

Barneys Madison storefront, Ben Ashkenazy. (Credit: Wikipedia Commons)

A city arbitrator has ended the lengthy rent dispute between Barneys and Ashkenazy Acquisition, declaring the retailer’s new annual bill to be $30 million.

The new rent represents double Barneys current rent and, with property taxes factored in, the figure is actually much higher, coming to an estimated total of $44 million per year, as the New York Post reports. The massive hike is still only half of what Ashkenazy had been seeking, however.

The landlord wanted to bump Barneys rent up to $60 million for the 275,000-square-foot space at 660 Madison Avenue. The retailer has a 20-year lease with Ashkenazy for their flagship store’s Upper East Side location and, until Friday, Barneys’ annual rent was $16 million per year.

The lease expires in January 2019 and the Madison Avenue store reportedly accounts for a third of Barneys’ revenue.

The retailer issued a statement to the Post expressing disappointment in the arbitrator’s decision. Ashkenazy declined to comment.

Richard Hodos, vice chairman of retail at CBRE, who was not involved in the negotiation told The Real Deal that Barneys was at a breaking point.

“While $20 million is low, it’s not that low,” he said in May. “Could they afford $25 million? Maybe. Could they afford $30 million? Probably not.”

As the negotiation has unfolded, the case has come to be seen as a test of the building’s value. Last summer, a TRD analysis found the UES riddled with vacant storefronts. [NYP]Erin Hudson