Craft retailer Michaels inks renewal with GFP in Chelsea

Store keeping 32K sf at 675 Sixth Avenue

GFP Real Estate chairman Jeffrey Gural and 675 Sixth Avenue (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and GFP Real Estate)
GFP Real Estate chairman Jeffrey Gural and 675 Sixth Avenue (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and GFP Real Estate)

A major retailer crafted a deal to stay put at its Chelsea location.

Michaels signed a lease renewal for 32,000 square feet on the ground floor of 675 Sixth Avenue, landlord GFP Real Estate announced Thursday. The deal keeps the arts and crafts retailer in place at the property, which it moved into in 2014.

GFP chairman Jeffrey Gural pointed to high foot traffic as a reason Michaels would’ve wanted to stay put, as the store is only a few blocks from Union Square and Madison Square Park.

The six-floor Chelsea building has seven commercial units and spans 237,000 square feet. It was built in 1901 to house the Adams Dry Goods department store.

Michaels is one of the building’s long-term anchor tenants — Trader Joe’s is the other. Michaels is the largest specialty retailer on the continent, operating nearly 1,300 stores across the United States and Canada.

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Gural represented both his firm and Michaels in the direct lease deal. A representative of GFP did not immediately respond to a request for comment about rents or terms of the lease.

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Two months ago, Gural’s firm secured a seven-year loan from a collection of banks for permanent and construction financing of 40 Worth Street. The $191 million loan will aid GFP in completing its work on the 199,000-square-foot property, which will house the offices for the Legal Aid Society.

Michaels’ lease renewal comes as spots of optimism have popped up in the region’s retail market, which struggled to stay afloat when the pandemic sent customers packing.

Across the New York metropolitan area, March’s average asking rent in the retail market jumped 2.9 percent year-over-year, according to a quarterly report from Marcus & Millichap. The average asking rent across the metro was $57.96 per square foot and vacancy rates in Manhattan dropped by 30 basis points year over year.