Ralph Lauren, Shvo Group feuding over Fifth Ave sublease

Landlord worries $5M lease is bad news for shopping corridor

New York /
Jan.January 21, 2021 06:15 PM
From left: Ralph Lauren and Michael Shvo with 711 Fifth Ave. (Getty, Shvo Organization)

From left: Michael Shvo and Ralph Lauren with 711 Fifth Ave. (Getty, Shvo Organization)

Who deserves to be on Fifth Avenue? That question is at the heart of a legal battle between Ralph Lauren and the landlord of its store on the shopping corridor.

In 2017, Ralph Lauren shuttered the 28,300-square-foot store at 711 Fifth Avenue, but continued to pay roughly $27 million annually for the unoccupied space. To lessen its losses, the luxury retailer made an agreement with Spanish fast-fashion chain Mango to sublease the storefront for around just $5 million annually.

But that agreement may never come to fruition. New York-based real estate investment firm Shvo Group, Bilgili Group, Deutsche Finance and the German pension fund BVK rejected the sublease on the grounds that Mango doesn’t meet the caliber of luxury tenant they envision for the property, according to Business Insider.

If the sublease were accepted, it could set a dangerous precedent for low rents on the luxury street.

“Landlords are loath to contribute to massively discounted market lease comparables,” Michael Glanzberg, a principal at the retail leasing and consulting firm Sinvin Real Estate, told the publication. “With broad vaccination around the corner, no owner wants to benchmark Covid rents.”

Rents on Manhattan’s retail corridors have hit historic lows amid the pandemic. On Fifth Avenue, the average asking rent hit $271 per square foot, a 22 percent year-over-year decline.

Shvo’s firm, along with partners including Bilgili Group and Deutsche Finance, purchased the Fifth Avenue building, also known as the Coca-Cola Building, in 2019 for $937 million.

[BI] — Sasha Jones





    Related Articles

    arrow_forward_ios
    Theaters in some cities are opening with restrictions. (Getty, Photo Illustration by Alison Bushor for The Real Deal)
    Coming attraction: Movie theaters reopen in New York, San Fran
    Coming attraction: Movie theaters reopen in New York, San Fran
    Restaurants and bars accounted for a majority of the gains in February (iStock)
    Leisure, hospitality big winners in February job gains
    Leisure, hospitality big winners in February job gains
    Ascena owns Ann Taylor, Lane Bryant, Lou & Grey and Cacique. (Getty)
    Ascena restructuring approved post-bankruptcy
    Ascena restructuring approved post-bankruptcy
    NYSRA president Melissa Fleischut (Photos via iStock, Getty, NYSRA/Illustration by Kevin Rebong for The Real Deal)
    Nearly 30% of New York restaurants expect to shutter in coming months
    Nearly 30% of New York restaurants expect to shutter in coming months
    Marc Fisher Footwear founder Marc Fisher, Trump Tower and Eric Trump (Getty)
    Trump Org sues Marc Fisher for $1.5M in rent
    Trump Org sues Marc Fisher for $1.5M in rent
    Target CEO Brian Cornell. (Getty)
    Internet, shminternet: Target adds, renovates stores as money pours in
    Internet, shminternet: Target adds, renovates stores as money pours in
    (iStock/Illustration by Kevin Rebong for The Real Deal)
    A year later, deferred rent may be restaurants’ downfall
    A year later, deferred rent may be restaurants’ downfall
    State Sen. Brad Hoylman and State Assemblymember Harvey Epstein (Getty)
    Lawmakers propose canceling restaurant rent, providing relief for landlords
    Lawmakers propose canceling restaurant rent, providing relief for landlords
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...