Jeff Sutton Leases Entire Soho Retail, Resi Property

Jeff Sutton is going small with his latest endeavor, a miniscule Soho property lease designed to generate cash through retail rent and a redeveloped group of residential units.

Wharton Properties signed a 35-year ground lease to take over 78 Greene Street from long-time landlord Robert Zeisel, PincusCo reported. Financial terms of the deal for the six-story, 14,000-square-foot property were not disclosed.

The lease was revealed in a memorandum published to public records days before Christmas. The lease doesn’t technically begin until the first day of 2026, but it will run through the end of 2061.

Zeisel could not be reached for comment, while Wharton did not immediately return a request for comment from The Real Deal.

The sole broker on the deal was Peter Weisman of Weisman NYC, who shared additional details about what Sutton has in store.

Wharton plans to capitalize on the difference “between an increased rent roll and their obligations under the triple net lease,” Weisman told TRD, pointing to a turnover expected next December on the ground-floor retail space, occupied today by the Veronica Beard clothing boutique.

Wharton also plans to redevelop the upper floors to high-end residential space, according to Weisman; there are five units in place. Weisman applied for rent stabilization exemptions for three floors “as a courtesy to the owner.”

Sutton’s been making moves in Soho. Earlier this year, an entity connected to Ikea purchased 529 Broadway in Soho from Sutton for $213 million. The Scandinavian furniture giant will occupy the first and second floors, a space totaling about 25,000 square feet.

Sutton is also in the midst of fighting a foreclosure lawsuit initiated by the German bank Helaba on his Herald Square property at 27-29 West 34th Street.

As for Zeisel, the ground lease deal allows him to step back from day-to-day management while keeping ownership and avoiding the capital gains tax, for which the implications would have been severe, according to Weisman.

— Holden Walter-Warner