Just days before the Black Friday deals started, Blackstone signaled it knew that New Yorkers wanted to shop.
The investment Goliath is buying a Soho retail portfolio for about $200 million from Maryland-based ASB Real Estate Investments, the biggest investor-led Manhattan retail purchase in three years. It’s a window into how investors are treating the asset class as the clouds part and the sun shines after retail landlords weathered a decade-long storm. Rents and occupancy rates are up, with Soho shining as a particular bright spot for the sector.
Average asking rents in Manhattan hit $716 per square foot, up 8 percent, year over year, in the third quarter, according to data from CBRE. Rent growth in Soho’s Spring Street corridor surged 43 percent, year over year, to $828 per square foot. For Soho’s Broadway retail, rent growth spiked 35 percent, year over year, to $679 per square foot.
Availability for retail spaces is down across the borough, according to CBRE. Soho saw 55 percent drop in availability in the third quarter, compared to the same three months last year, thanks in part to leases inked by New Balance, Gen Z Australian fast fashion favorite Princess Polly and Chinese fast fashion brand Urban Revivo.
While those brands chose to rent, other legacy brands have sought to become their own landlords. In December, Prada dropped $835 million on its Fifth Avenue flagship. The seller and their former landlord, Jeff Sutton’s Wharton Properties, turned around and sold 715-717 Fifth Avenue to Gucci parent company Kering for $963 million in January.
Prada snapped up a third Fifth Avenue address, the Crown Building at 730 Fifth Avenue, for $12.6 million in April.
Billionaire Bernard Arnault’s luxury giant LVMH has also been rumored to be property shopping. The firm, which owns Tiffany’s, Louis Vuitton and Dior, was reportedly exploring a purchase of 745 Fifth Avenue, the current home of the Bergdorf Goodman’s men’s store.
“None of them want to be still standing when the music stops and they don’t have a home for one of their brands,” CBRE’s Andrew Goldberg told The Real Deal earlier this year.
–– Kate Hinsche