In a final blow to fast furniture fans, IKEA is forking over $10 million to terminate its lease at the Rego Park Mall.
The deal comes 14 months after the Swedish furniture giant shuttered its only Queens location, citing its customers’ “changing needs.” The lease was originally set to expire in December 2030, but included a right to terminate after March 16, 2026, according to an SEC filing.
The store was in business for less than two years.
Alexander’s, the department store chain-turned-REIT controlled by Vornado Realty Trust, owns the mall. It inked a lease modification agreement with Ikea in September that speeds up the lease termination date to April 1. Under the agreement, IKEA will pay its remaining rent due through March 16, 2026, and the $10 million termination payment over the modified lease term, according to the filing.
The Queens location was originally announced in 2020 but the launch was delayed to January of 2021 because of the pandemic. The store was the first in the United States based on a new, smaller format.
The Rego Park Mall spans 960,000 square feet across two buildings and is bound by Queens Boulevard, 62nd Drive, 63rd Road and 97th Street. The center is anchored by a 50,000-square-foot Burlington, a 36,000-square-foot Marshalls, a 145,000-square foot Costco, and a 133,000-square-foot Kohl’s, which has been subleased.
Last year, Ikea announced plans to expand in the United States. It is slated to grow by 17 stores, mostly in the South, on the back of a $2 billion investment from Ingka Holding BV, the largest owner and operator of Ikea stores.
Another recent attempt in New York City, a small-format “Planning Studio” on Third Avenue in Manhattan, also closed after two years, in January 2022.
Representatives from Ikea and Vornado did not immediately respond to requests for comment.
Read more
