The former Playboy Club will be the new headquarters for a luxury jewelry and watch company after the owner snapped up the Midtown building at a foreclosure auction.
Avi Hiaeve, through the entity 5 East 59th Street Holdings LLC, paid $26.7 million for 5 East 59th Street. Hiaeve plans to renovate the nine-story building and use the bottom two floors as a store for his company, Avi and Co., he said.
Hiaeve said he will house his company offices on the upper floors and rent out the remaining space.
The deal comes amid a recent trend of luxury retailers buying their buildings. Kering, the French luxury group that owns Gucci, Balenciaga and Alexander McQueen, bought the retail portion of 715-717 Fifth Avenue for $963 million from Jeff Sutton and SL Green earlier this year.
That was just weeks after Jeff Sutton sold 724 Fifth Avenue to Prada, a building that houses its flagship store, for $425 million, and neighboring 720 Fifth for $410 million.
Hiaeve said he wanted to move his New York store from the Diamond District closer to the prime shopping area on Fifth Avenue and had been looking at spaces to buy or lease.
“This just happened to be the best thing to do – to buy it and own the building,” he said. “I think I got a very good deal on it.”
The building has 39,000 square feet and is currently vacant, according to the listing from JLL. The sale, which was first reported by PincusCo, ends a long saga for the former club venue just off Fifth Avenue.
The Plaza District property was owned by BentallGreenOak and Daniel Ghadamian and Josh Zamir’s Capstone Equities. They paid $85 million for it in 2015, with the Playboy Club gone and office tenants on the verge of leaving.
The buyers borrowed more money to turn it into an eight-story building for a single tenant, with retail and showroom space on the lower floors and offices above. There was speculation that it could rent for $10 million a year, but the grand plan did not come to fruition.
China Overseas Bank filed a foreclosure suit in November 2021, alleging the owners defaulted on three loans backed by the property.
With the property’s debt up to $70 million, a judge in February ordered the foreclosure sale. The auction took place on January 17.
Hiaeve borrowed $18.2 million from Cerco Funding for the purchase, according to public records. Avi and Co. has 40 employees and retail stores in New York, Aspen and Miami.
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