This year’s most lucrative retail leases look different from the usual Manhattan fare.
Generally an apparel or beauty store appears at the top of the list. Or, like last year, a luxury retailer.
But this year, decidedly unsexy big-box operators dominated the charts.
And though many retailers were wary of expansion, some were bullish. Target, for example. The big-box retailer had four of the 10 most valuable retail leases this year, ranked by annual rent.
“While the transaction volume was down significantly in 2020, the deals that were done, they all have a common thread, and that is spaces that were leased were of the highest quality,” said Richard Skulnik of RIPCO, who represented Target in the deals. “I would say there was a flight to quality during 2020 for transactions that were completed.”
A few expensive leases continued to be signed on the luxury streets, with one on Madison Avenue and two on Fifth Avenue.
There were also a fair number of renewals with major price tags. Bed Bath & Beyond renewed its lease at 620 Sixth Avenue for $6.9 million per year. Home Depot renewed at 40 West 23rd Street for $9 million annually. And Chanel stayed at 139 Spring Street for $3.6 million.
Still, this year’s top deal fell far below the whopping $16 million Hermès of Paris paid for 12 months at 706 Madison Avenue.
Here are the 10 most valuable retail leases of the year, according to data from PincusCo.
1. Home Depot | 410 East 61st Street | $9 million
Home Depot has had some year. As homebound Americans rebuilt their decks and home builders laid down foundations en masse, Home Depot and five other big-box chains accounted for 29 percent of all U.S. retail sales in the second quarter. And it’s growing. Home Depot’s massive 120,000-square-foot lease at 410 East 61st Street — formerly home to a Best Bath & Beyond — topped the list. Peter Ripka of RIPCO Real Estate represented Home Depot in the Oct. 1 deal. RIPCO also represented landlord Gazit-Globe Group.
2. Harry Winston | 712 Fifth Avenue | $7.87 million
The luxury jeweler expanded its footprint with an 18,000-square-foot lease at Paramount Group’s 712 Fifth Avenue. The landlord and tenant were both represented in-house.
3. LVMH owned Fendi and Berluti | 595 Madison | $6 million
When Coach abruptly closed its doors at Vornado’s 595 Madison Avenue in January, it seemed like a blow to the luxury corridor. But within days, Fendi and Berluti inked a deal for the 8,000-square-foot space. Robin Zendell of Robin Zendell & Associates represented the tenants. Vornado was represented in-house.
4. Target | 150 East 86th Street | $5.75 million
With plans to open up to 40 stores a year, Target has been on a path of rapid expansion in New York City and across the country.The first Target deal on this list for 56,000 square feet at Vornado’s 150 East 86th Street. The store was previously home to a Barnes & Noble, which announced its departure in June. Skulnik represented Target, while Vornado was represented in-house.
5. Sephora | 4 Union Square | $4 million
The first and only beauty retailer in the top 10 is Sephora for its lease of 8,018 square feet at Vornado’s Union Square. The beauty and makeup chain signed a deal in February for the ground floor of the former Forever 21 space. Virginia Pittarelli represented Sephora, while Vornado was represented in-house.
6. Target | 10 Union Square East | $4 million
Target signed a 15-year-lease in the Empire State Realty Trust–owned Union Square Building in January. The retailer will occupy 32,579 square feet. Skulnik represented Target, while Empire State was represented in-house.
7. Chopard | 730 Fifth Avenue | $3.63 million
The Swiss jeweler relocated its flagship store from Madison Avenue to the Crown Building, paying an estimated $3.63 million for 2,422 square feet. Chopard was represented by Cushman & Wakefield’s Eric Le Goff and James Downey, while landlord Brookfield Properties was represented in-house.
8. The Lego Group | 75 Rockefeller Plaza | $4 million
The Lego Group snapped together a 10,000-square-foot lease to relocate and expand at Tishman Speyer’s Rockefeller Center. Cushman & Wakefield’s Andrew Kahn and Chris Stanton represented the Danish toy company, while Tishman Speyer was represented in-house.
9. Target | 121 West 125th Street | $3.36 million
Target signed a lease in April for 48,798 square feet in a new-construction building. The $242 million mixed-use project in Harlem will also be home to 170 units of affordable housing and a civil rights museum. Skulnik once again represented Target, while BRP, Dabar Development, L+M Development Partners, Taconic Partners and the Prusik Group were represented in-house.
10. Target | 258 8th Avenue | $3.2 million
Target signed a deal late in the year to expand to Chelsea, taking over 29,000 square feet in a pending project by JJ Operating. Skulnik once again represented Target, while the developer was represented in-house.