Upper Fifth Avenue (the portion between 49th and 59th streets) is the most expensive retail stretch in the world. However, it’s not the most stable. This past year, the strip saw an unusual amount of activity taking place in its 60-plus spaces, with about a dozen retailers signing leases, opening stores or changing brands.
The half-mile span, where CBRE Group says asking rents average more than $2,400 per square foot, is now jammed with holiday shoppers jostling for gifts.
But behind the scenes, there are other groups jockeying for position: the real estate brokers, dealmakers and analysts who pore over pedestrian counts, comparable leases and store revenue numbers to determine what spaces they or their clients can afford.
This month, The Real Deal looks at the current tenants in the nearly three dozen retail buildings along the stretch, as well as possible new arrivals. We combed through property records and news reports, and interviewed brokers and owners who specialize in Fifth Avenue.
While Cushman & Wakefield reported in the third quarter that the availability rate was just 9 percent, we found the actual amount of space “in play” to be much higher. TRD’s analysis showed about 56,000 square feet of ground-floor space was being discussed, much of it quietly. That’s equivalent to about 20 percent of the 290,000 square feet of ground-floor retail space (excluding department stores) fronting Fifth Avenue. (The detailed items below are for those properties that may be “in play” sometime in the next few years, while the items on the shorter list are retail spaces that have seen activity in the last year.)
Because so few spaces are publicly marketed, many brands have to elbow their way in, often by buying out in-place tenants.
Retail broker Robin Abrams of Lansco said that new property owners on Fifth Avenue are the most likely to bring in new (and, of course, higher-paying) tenants. “They are willing to be proactive,” Abrams said, “in getting possession of their space for different tenancy, for higher dollars. They have helped to reshape the street.”
767 Fifth Avenue (General Motors Building)
Address: 767 Fifth Avenue (General Motors Building)
Landlord: Boston Properties
Tenant: CBS
Size: 6,514 square feet on the ground floor, plus about 30,000 square feet on two other levels
Lease status: Expiration March 2015
Asking rent: $11.5 million, sources said, but no official asking rent
Notes: CBS, through its brokerage, CBRE Group, is marketing the glass-enclosed space along 59th Street on the north side of the GM Building, currently occupied by its TV studios. The available location is just behind the Apple store, and across from the Plaza Hotel. One source said food retailers were eyeing the site, but it isn’t clear if Boston Properties would accept that. Another said an apparel tenant, such as a Nordstrom or a foreign department store without a U.S. presence, was more likely.
730 Fifth Avenue (Crown Building)
Address: 730 Fifth Avenue (Crown Building)
Landlord: Winter Organization
Tenant: Bulgari
Size: 3,675 square feet on the ground floor, plus about 6,000 square feet on multiple levels
Lease status: Renewed in 2005, expiration date unknown
Rent: $1,300 per square foot
Notes: Italian jeweler Bulgari locked in this lease in 2005 at $1,300 per foot on the prime, ground-floor space at the corner of 57th Street. But one source said luxury retailer Christian Dior, currently located mid-block at 21 East 57th Street, is looking to swap locations with Bulgari. LVMH Moët Hennessy Louis Vuitton, which owns Christian Dior, acquired Bulgari in September and may want to give Dior a more prominent location on Fifth Avenue. However, other brokers were skeptical the two would switch, noting that the corner has jewelers Tiffany, Van Cleef & Arpels, Piaget and Mikimoto, making it a smart location for Bulgari.
724 Fifth Avenue
Address: 724 Fifth Avenue
Landlord: Under contract to SL Green and Jeff Sutton (part of a building package being purchased along with Stonehenge Partners)
Tenant: Prada
Size: 15,000 square feet on multiple floors
Lease status: Expiration 2016 or 2017
Rent: Unknown
Notes: Prada has been a retail tenant since 1998 at this property, which is under contract. Sutton is known for buying properties to create new opportunities. And one source pointed out that he controls neighboring 720 Fifth Avenue, where Abercrombie & Fitch has a lease that expires in 2018. If combined, the properties would have 100 feet of Fifth Avenue frontage — one of the largest exposures on the street (after Gucci at Trump Tower) — and give Sutton leverage to get a premium rent.
711 Fifth Avenue
Address: 711 Fifth Avenue
Landlord: Coca-Cola
Tenant: Vacant (formerly Disney)
Size: 8,200 square feet on the ground-floor corner, plus 29,200 square feet on three levels.
Lease status: No lease in place
Asking rent: $20 million per year, sources said
Notes: The space at the corner of 55th Street has been empty since Disney moved out in 2010. Brokers say building owner Coca-Cola has been reluctant to lease the space, which it’s been holding for a possible Coke store selling company merchandise. However, others said Coke has just been picky about potential tenants. Regardless, because the company has owned the property since 1983, it has no financial pressure to lease the space up.
2 East 55th Street (St. Regis Hotel), and 697 Fifth Avenue
Address: 2 East 55th Street (St. Regis Hotel), and 697 Fifth Avenue
Landlord: Crown Acquisitions, Goldman Properties and Feil Organization
Tenants: De Beers, Emilio Pucci and Bottega Veneta
Size: 8,000 square feet on the ground floor, plus 17,000 square feet on four other levels
Lease status: Less than four years remaining
Asking rent: Unknown
Notes: In a joint venture, the owners paid $117 million in 2009 for these two buildings. They are now quietly marketing the space, which is occupied by three separate retailers. Crown, owned by the Chera family, is known for a focus on retail, and like Sutton generally buys properties with plans to reposition them. The space would likely be leased to two separate tenants, sources said.
694 Fifth Avenue
Address: 694 Fifth Avenue (Peninsula Hotel)
Landlord: Peninsula Hotel (through a long-term lease)
Tenant: Lindt
Size: Approximately 2,000 square feet
Lease status: Expiration December 2015
Rent: Unknown
Notes: Swiss Chocolatier Lindt signed a lease this year for 1,250 square feet two blocks south of 694 Fifth Avenue at 665 Fifth Avenue, where asking rents were $2,400 per foot, giving it two locations on the strip. A source said Lindt would likely not renew its Peninsula Hotel lease, which expires in 2015. However, Lindt denied that, saying it would renew. A source said Lindt’s fellow tenant in the Peninsula Hotel, German watchmaker Wempe, is expected to remain at the hotel even as it, too, signed a lease this year at 665 Fifth, making it one of the few retailers with two locations on the pricey stretch.
693 Fifth Avenue (Takashimaya Building)
Address: 693 Fifth Avenue (Takashimaya Building)
Landlord: Thor Equities
Tenant: Forever 21
Lease status: Short-term
Size: 5,462 sq. ft. on the ground floor (part of a total of about 20,000 sq. ft. offered on four floors)
Rent: $14.8 million
Notes: Joseph Sitt’s Thor Equities paid a hefty $142 million for the 20-story building between 54th and 55th streets in July 2010, but has not landed a permanent tenant yet. The space is occupied by Forever 21, but the discount store’s lease is short-term. Sitt is aggressively marketing the space. In fact, it’s the only property with a “for lease” sign on the 10-block stretch. Brokers say it has a difficult — but not insurmountable — layout for tenants. Sitt told The Real Deal last April that he had six tenants looking to take retail space.
680 Fifth Avenue
Address: 680 Fifth Avenue
Landlord: Buchmann family
Tenant: The Gap
Size: 34,000 square feet on four levels
Lease status: Unknown
Rent: Unknown
Notes: Brokers started circling the Gap location following news in October that the company would shutter 200 stores nationally. But others cautioned that the company said it would only close underperforming locations, and this is seen as one of its most profitable branches. The once omnipresent clothing retailer has been in the space since 1997.
636 Fifth Avenue (Rockefeller Center)
Address: 636 Fifth Avenue (Rockefeller Center)
Landlord: Tishman Speyer
Tenant: Façonnable
Size: 21,000 square feet on three floors, including 7,100 square feet on the ground
Lease status: Six years left with five-year option to renew
Asking rent: Sublease for $15 million
Notes: Façonnable, through broker Jason Pruger at Newmark Knight Frank, is offering its space at the corner of 50th Street as a sublease for $15 million a year. Brokers said the landmarked Rockefeller Center is restricted in what kind of tenants can take space there because of efforts to create a more upscale ambience.
Recent deals on Fifth Avenue
10. Address: 743 Fifth Avenue
Landlord: LVMH (Louis Vuitton)
Tenant: Being rebuilt for Louis Vuitton
Size: 3,298 sq. ft. on the ground floor
Price: Acquired for $60 million
11. Address: 717 Fifth Avenue
Landlord: Jeff Sutton and SL Green
Tenant: Dolce & Gabbana signed lease
Size: 18,400 square feet total
Rent: 15-year deal, $16 million per year
12. Address: 691 Fifth Avenue
Landlord: Vornado Realty Trust
Tenant: M.A.C. reportedly signed lease
Size: 1,400 square feet
Asking rent: $3,000 per square foot
13. Address: 689 Fifth Avenue
Landlord: Vornado Realty Trust
Tenant: Massimo Dutti replacing Zara
Size: 15,000 square feet (on three levels)
Rent: $950 per square foot
14. Address: 675 Fifth Avenue
Landlord: Yeung Chi Ching, Inc.
Tenant: Stuart Weitzman moved in
Size: 1,600 square feet
Rent: Unknown
15. Address: 665 Fifth Avenue
Landlord: Rolex Realty
Tenants: Wempe and Lindt signed leases
Size: 1,600 square feet on the ground floor (Wempe); 1,250 square feet on the ground floor (Lindt)
Asking rent: $2,400 per square foot
16. Address: 666 Fifth Avenue
Landlord: Carlyle Group, Kushner Companies, Crown Acquisitions
Tenants: Uniqlo, Swatch opened
Size: 90,000 square feet (Uniqlo); 2,000 square feet (Swatch)
Rent: About $20 million per year
17. Address: 666 Fifth Avenue
Landlord: Inditex
Tenant: Zara (division of Inditex)
Size: 32,000 square feet
Price: Acquired for $332 million
18. Address: 650 Fifth Avenue
Landlord: Alavi Foundation
Tenant: Godiva Chocolatier opened
Space: 1,200 square feet
Rent: Unknown