Kering Sells Majority Stake at 717 Fifth Ave for $690M

Kering made good on its goal to sell a massive stake in the Fifth Avenue property it bought roughly two years ago.

Private equity firm Ardian bought a 60 percent stake in 715-717 Fifth Avenue from Gucci’s parent company, the two firms announced on Tuesday morning. The deal values the 115,000-square-foot property at $900 million and will see Kering score $690 million in proceeds. Eastdil Secured advised Ardian in the transaction.

Kering is hanging on to a 40 percent stake in the Plaza District property, which it bought early last year from Jeff Sutton and SL Green for $963 million. The acquisition was part of a strategy to buy prime assets in strong markets across the globe.

It was also part of a trend of retailers acquiring their own spaces in Manhattan rather than leasing them. Around the time of the Kering deal, Prada paid $835 million for 724 and 720 Fifth Avenue, which was also sold by Wharton Properties boss Sutton.

In recent months, however, Kering has been looking to offload properties to improve its balance sheet. By the end of last year, Kering’s debt soared to approximately $12 billion, leading it to start cutting costs and sell stakes in real estate across the globe.

Earlier this year, Ardian and Kering entered into a similar joint venture centered on a three-property portfolio in Paris. Kering has also been exploring disposition options in Milan’s Via Montenapoleone and in Tokyo. The mission is to raise at least 2 billion Euros through real estate transactions over a two-year period.

Notably, France-based Ardian never made a real estate investment in the United States prior to this deal.

“We are truly committed to acquiring and managing ultra prime assets in the most sought-after locations,” Ardian executive Omar Fjer said in a statement.

Elsewhere in the Plaza District, Louis Vuitton filed an application with the Department of City Planning for a 25-story building at 1 East 57th Street, which would span 148,000 square feet alongside Fifth Avenue.