Jeff Sutton quietly sold most of Crown Building stake to Brookfield

Retail magnate unloaded stake to partner Brookfield last summer

Crown Building at Fifth Avenue and 57th Street and Jeff Sutton of Wharton Properties (Building via Google Maps)
Crown Building at Fifth Avenue and 57th Street and Jeff Sutton of Wharton Properties (Building via Google Maps)

High street retail in New York has been decimated this year as luxury stores remain largely empty. But one major investor made a move last year that fortuitously limited his exposure to the pain.

Jeff Sutton quietly sold the majority of his stake in the retail portion of the Crown Building, the prized property that sits on Fifth Avenue and 57th Street, widely considered one of the best retail corners in the city.

Sutton’s Wharton Properties sold everything except a nominal piece of its 50 percent stake in the Crown Building’s retail to partner Brookfield Property Partners in August 2019 for $779 million, financial filings from the publicly traded Brookfield show. The sale has not been previously reported.

The trade coincided with the partners’ $807 million refinance of the 35,000-square-foot retail property led by Apollo Commercial Real Estate.

But Sutton was apparently unhappy with the terms of the refinancing and negotiated an exit from the property, according to a source familiar with the transaction.

Brookfield’s filings show it now owns 99.677 percent of the retail, though a source close to the property said that figure is the result of some creative accounting and the number is somewhat lower.

Sutton declined to comment and a spokesperson for Brookfield did not respond to requests for comment.

Still, it proved to be a serendipitous move, as retail values have taken a nosedive this year due to the coronavirus.

“It was the best deal Sutton ever made,” the source said.

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The deal marked Sutton’s effective exit from one of the most expensive pieces of retail real estate purchased at the height of the market. He and mall company GGP, which Brookfield took control of three years later, paid $1.75 billion in 2015 to purchase the Crown Building from the Spitzer and Winter families.

(Sutton and GGP bought the 400,000-square-foot building with Michael Shvo and Vladislav Doronin. The partners then split the property, with Sutton and GGP keeping the retail portion, and Doronin converting the upper office floors to luxury residential condos.)

Shortly after the acquisition, Sutton and GGP renewed Italian accessories maker Bulgari’s lease for another 15 years at a record rent of $5,500 per square foot — setting a new high-water mark for retail. Other tenants include Japanese pearl-seller Mikimoto and Swiss watch-seller Piaget.

But those heady days are long gone. Retail rents had been in decline for several years before the onset of the pandemic, the full impact of which is still unknown.

Vornado Realty Trust recently wrote down a $306 million loss on the $2.6 billion gain it recognized when the REIT sold a stake in a group of retail properties on Fifth Avenue and Times Square last year. x

At the Crown Building, Swiss watchmaker Chopard signed a lease last month for 2,400 square feet at $3,500 per square foot. The luxury jeweler will have 1,200 square feet on the ground floor.

Sutton, meanwhile, has been wheeling and dealing on both sides of the East River. After selling his Crown stake, the retail mogul earlier this year sold 530 Broadway in Soho to a partnership led by Shvo for $400 million.

And in Brooklyn, Sutton recently sold a handful of properties on Fulton Street for $22 million.

On the buy side, Sutton late last year bought a development site in Williamsburg for $20 million at a record price for the neighborhood of $3,226 per square foot. And earlier this year he picked up a small retail property in Midwood for $11.75 million.

Contact Rich Bockmann at or 908-415-5229.