Banana Republic inks mega Flatiron lease
UPDATED, 5:10 p.m., Feb. 3: Clothing store chain Banana Republic signed a 15-year lease taking 28,000 square feet in the Flatiron District building at 105 Fifth Avenue. The space was formerly occupied by bookseller Barnes & Noble.
The apparel giant, a division of the San Francisco-based public-company Gap, signed the deal for the lower level, first and second floors in mid-January and expects to move in this fall, said Nicholas Haines, CEO of the Bromley Companies, a national property ownership firm based in Midtown South.
Haines and his colleague Peter Tong represented the landlord, Barrister Realty Partners, in the deal, as the brokers. Banana Republic represented itself in the deal, Haines said.
An industry source said the asking rent was $4 million per year.
Banana Republic did not immediately respond to a request for comment. Barrister could not be reached for comment.
The retailer currently leases space at 114 Fifth Avenue at 17th Street, where it has men’s clothing, and across the street at 89 Fifth Avenue between with women’s clothing. It is closing those two stores and consolidating at the new location a block farther north.
This lease adds to the Gap’s major long-term investment in the neighborhood. The Gap, Gap Kids and Gap Body lease 39,000 square feet of space at 120 and 122 Fifth Avenue, while its workout wear chain Athleta opened a store at 126 Fifth Avenue in November. Just Up The Street, at 125 Fifth Avenue, subsidiary Intermix has space at 125 Fifth Avenue. In addition, the Gap’s fast-fashion brand Old Navy in 2009 renewed its 64,000-square-foot space at 610 Sixth Avenue, at 18th Street, one avenue away.
“The larger story here is the investment that many national and international retailers are making in their real estate,” Haines said, citing Zara, J Crew, the Gap and others. “[They] have either expanded their retail presence or made significant investments into renovating their stores.”
The Flatiron neighborhood has a tight vacancy rate – just 5 percent — data from retail-focused brokerage RKF shows.
The asking rents in the area are a bit higher than the figures Cushman & Wakefield reported for the Meatpacking District and Soho in its fourth quarter 2013 retail report, which averaged $359 per foot and $480 per foot, respectively.
The asking rent for L&L Holding’s 114 Fifth Avenue is $500 per square foot on the ground floor, according to industry sources. Meanwhile, Restoration Hardware, represented by Dallas-based Open Realty Advisors, renewed its lease last year, insiders said. The landlord filed plans in June to add the second and third floors to the existing ground floor and lower level in the buildings, city Department of Buildings record show.
“Banana [Republic] wanted to stay in the market and commit long term,” the retailer’s advisor, Ariel Schuster, an executive vice president at RKF, said. “We explored every potential and this was the best.”
Open Realty and L&L Holding did not immediately respond to a request for comment.
The new lease will likely be one of the largest deals by square feet in Manhattan for 2014, and would have placed it among the top 20 leases for 2013.
Barrister Realty, majority owned by Midtown South-based Two L Capital, controls the commercial space on the lower level, first and second floors of 105 Fifth Avenue, a residential cooperative building, through a long-term lease with renewal options through 2081, city property records show.
Two L Capital purchased an 80 percent interest in Barrister from Barnes & Noble founder and largest shareholder Leonard Riggio in October 2012 for $18.08 million, city records indicate.