UPDATED, April 2, 2021, 10:15 a.m.: In May 2019, luxury retailer Domenico Vacca exited its Midtown flagship store amid a legal battle with landlord Solly Assa, who accused the company of not paying its $4 million annual rent.
Nearly two years and one pandemic later, the mixed-use building at 15 West 55th Street has seen its value slashed by nearly 70 percent.
A new appraisal from Trepp lists the value of the 59,000-square-foot building at $37.8 million, down sharply from $119 million in 2015. The property includes 15,000 square feet of retail space and 31 apartments, according to Trepp. Domenico Vacca’s lease had been set to run until 2025 before the space was vacated.
The new appraisal makes the building worth far less than the $73 million CMBS loan that Barclays provided on it. After Domenico Vacca left the location, net operating income shrunk to $660,921 at the end of 2019, down from $4.9 million at the end of 2017, according to Trepp.
Assa defaulted on the loan and it was sent to special servicing in 2019. Earlier this year, Assa — who founded and runs Assa Properties — worked out a deal to modify the loan and reduce the interest rate to 3 percent. The loan on the building is now current.
The property is one of two buildings known as The Branson at Fifth; the other is 19 West 55th Street. Assa acquired them for a combined $60 million in 2013. He sold 19 West 55th in 2018.
Assa attributes the valuation plunge at 15 West 55th largely to New York City’s Covid-related retail woes.
“It’s hard right now, everything has stopped,” said Assa, who also developed Cassa Hotel & Residences nearby. “It’s a very unusual situation for us and the industry.”
In February, The Real Deal counted 32 vacant storefronts along 17 blocks of Fifth Avenue in that Midtown area, which is some of the most expensive retail real estate in the world but has been slammed over the last year. Numerous tenants have walked away from leases, including luxury retailer Valentino. The company exited its nearly 20,000-square-foot space at 693 Fifth Avenue, with eight years remaining on the lease. The brand inked a new lease for a smaller store in Soho in February.
For Assa, the valuation plunge at 15 West 55th is the latest problem for a property that has had several. In January 2018, he agreed to pay $1.2 million to the city following allegations the building and three others were being operated illegally as a hotel. Around the same time, he sold 19 West 55th for $50 million to Abraham Leifer’s Aview Equities.
Assa maintains he didn’t know about the illegal rentals. “We never ran any of that,” he said.
Note: The story has been updated to reflect the current status of the loan on 15 West 55th Street.