High retail rents in Soho generate a listing dispute
Marketing material pricing 80 Wooster Street at $26 million draws cease-and-desist letters
Soho’s escalating retail rents have led to a dust up over a retail space at 80 Wooster Street, with the irate owner of the property taking on brokers looking to sell it.
Several brokers, including Christen Portelli and Larry Ross of the Highcap Group, sent out marketing materials for the co-op with an asking price of $26 million (The Real Deal reviewed a copy of Highcap Group’s marketing material). At the same time, another brokerage, Sinvin Real Estate, has an exclusive listing offering the same space for lease, asking $985,000 per year, or about $220 per square foot, sources said.
But the landlord does not want to sell, insiders said. Indeed, attorneys for the retail co-op owner last week sent out cease and desist letters to Highcap and others, a person familiar with the situation told TRD.
A spokesperson for Christopher Fischer Cashmere and its company C3 Concepts, did not immediately respond to a request for comment. Highcap Group did not respond to requests for comment. Sinvin declined to comment.
The retail unit at the base of the seven-story co-op building between Spring and Broome streets has 4,300 square feet on the ground floor and 2,000 square feet on the lower level, and is owned by an affiliate of designer Christopher Fischer Cashmere. That company currently occupies the retail space. The $26 million price would yield a capitalization rate of about 2.6 percent based on a net income to the landlord of $700,000, which would be a very low rate of return on the invested money. It also underscores the demand for property in the area.
The asking rent at 80 Wooster is far below some recent comparable deals along Spring Street, but one insider said foot traffic falls dramatically from the major streets. For example handbag designer Kate Spade is paying about $700 per square foot at 152 Spring Street and J. Lindberg is paying $600 per foot at 126 Spring, according to retail sources.
Ground floor retail asking rents jumped 41 percent over the past year on Broadway in Soho, between Houston and Broome streets, the most recent figures from the Real Estate Board of New York show. The asking rent rose from $542 per foot to $762 per foot on the shopping district’s main thoroughfare.
Even as Soho rents have been rising steadily, the building is historic for other reasons. 80 Wooster was integral as a nexus of art and real estate in the development of Soho. In 1967, the artist George Maciunis and leader of the Fluxus movement, converted it into the first of 16 artist co-ops known as Fluxhouse Cooperatives that brought residential tenants to underutlized former manufacturing buildings.
The retail space was once occupied by Jonas Mekas’ Cinematique, which was home to art shows, dance, theater and ‘happenings,” according to the 2010 book Illegal Living by Roslyn Bernstein and Shael Shapiro.
One insider said the rents on the side streets are much less than the main arteries like Broadway, Spring and Prince.
There, investors are snapping up buildings. Sitt Asset Management and an affiliate of the Safra family paid $26 million for 145 Spring Street, an eight-story loft building with residential units and retail paying just $560,000 per year at the base.