The owners of Gucci on Monday bought a prime Fifth Avenue retail property for a whopping $963 million — and it could mean the boot for rival fashion house Armani from its flagship location.
Gucci’s parent Kering scooped up the 115,000 square-foot, three-level retail space at 715-717 Fifth Ave., at East 56th Street, which sits at the base of a 28-story office tower known as the Corning Glass Building.
The latest retail condo sale is momentous on several levels.
It marks seller Jeff Sutton’s third spectacular coup on the fabled shopping street in less than a month. The prominent retail developer/landlord’s Wharton Properties sold both 720 Fifth Ave. and 724 Fifth to Prada for a total $835 million last month — which were the city’s largest combined investment-sale transactions in 2023.
Gucci’s owner said the purchase of the Corning Glass Building “represents a further step in Kering’s selective real estate strategy aimed at securing key, highly desirable locations for its houses.”
It also reflects the soaring fortunes of the “World’s Greatest Shopping Street,” with the Kering purchase accelerating the trend of major retailers buying Midtown Fifth Avenue properties for their own use — following Prada, LVMH, Rolex and Harry Winston, among others.
Gucci bought the retail property for a whopping $963 million. ZUMAPRESS.com
“Note that most of the buyers are foreign companies,” Cushman & Wakefield retail power-broker Joanne Podell said. “Maybe because in Europe, they buy long-term interests in retail properties. They don’t have to deal with lease expiration dates. Of course there is innate value in buying on the most important retail street in the world.”
It is not clear how the sale will impact the building’s current tenant, Armani boutique and restaurant at 717 Fifth – or the current Gucci flagship at Trump Tower across the street.
Another fashion rival, Dolce & Gabbana, also has a large store at the location. Kering’s lines in addition to Gucci include Saint Laurent, Balenciaga and Alexander McQueen.
Armani at 717 Fifth Ave. The purchase accelerates the trend of major retailers buying Midtown Fifth Avenue properties for their own use Elizabeth Lippman
Armani’s lease at 717 Fifth, signed in 2007, is said by sources to be up in a few months. The renowned fashion house will soon open a new store and restaurant at 760 Madison Ave., where it partnered with SL Green in a Giorgio Armani-branded condo tower.
SL Green was a small minority partner in the Fifth Avenue retail property. SLG chief investment officer Harrison Sitomer said, “This disposition represents another successful investment in our partnership with Jeff Sutton. The transaction is yet another example of how well-located assets continue to generate demand for global investors across cycles.”
Source link: https://nypost.com/2024/01/22/business/gucci-owner-pays-nearly-1b-to-scoop-up-tower-on-red-haute-fifth-avenue/