Value of building at former Domenico Vacca flagship cut by 70%

Latest appraisal of Solly Assa-owned Midtown mixed-use property follows luxury retailer’s exit

New York /
Apr.April 02, 2021 07:00 AM
15 W 55th owner Solly Assa. (Getty, Google Maps)

15 W 55th owner Solly Assa. (Getty, Google Maps)

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.


    Related Articles

    arrow_forward_ios
    From left: Michael Dell with 25 Water Street, Alex Sapir with 261 Madison Avenue and Marc Holiday with One Madison Avenue (Getty, Edge Funds, Sapir Organization, SL Green)
    Office properties (yes, office!) got Manhattan’s biggest December loans
    Office properties (yes, office!) got Manhattan’s biggest December loans
    Salim Assa with 15 West 55th Street
    Troubled Midtown rental saga headed for a foreclosure finale
    Troubled Midtown rental saga headed for a foreclosure finale
    Atlas Hospitality Brokerage president Alan Reay (Atlas Hospitality Brokerage)
    Listen: Inside the looming distress across the hotel market
    Listen: Inside the looming distress across the hotel market
    Businessman arguing with buildings
    The bickering bros: Jemals escalate battle over portfolio
    The bickering bros: Jemals escalate battle over portfolio
    Vornado Realty Trust chairman Steve Roth and 401 Seventh Avenue (Getty, LoopNet, Vornado Realty Trust)
    Vornado eyeing NYC’s casino sweepstakes
    Vornado eyeing NYC’s casino sweepstakes
    Chick-fil-A CEO Andrew Cathy and a rendering of Chik-fil-A 2205 Central Park Avenue in Yonkers  (Chik-fil-A/City of Yonkers)
    Chick-fil-A hatches first Westchester location
    Chick-fil-A hatches first Westchester location
    Harry Macklowe with 1 Wall Street
    Macklowe’s 1 Wall Street tops Manhattan’s largest retail leases of 2022
    Macklowe’s 1 Wall Street tops Manhattan’s largest retail leases of 2022
    A photo illustration of The Artisan Hotel at 1501 W Sahara Ave in Las Vegas (Getty, LoopNet)
    Las Vegas to get its first cannabis-friendly hotel
    Las Vegas to get its first cannabis-friendly hotel
    arrow_forward_ios

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

    Loading...