Vying for a Manhattan forever-home, retailers are racing to buy their storefronts

Prime metropolis unit storefronts are truthful uncommon that businesses are opting for nan atomic action — buying. 

Kering and Prada bought their stores connected Fifth Avenue past twelvemonth for $835 cardinal and $963 cardinal respectively. Now, Uniqlo is purchasing 100,000 quadrate feet of unit it already occupies astatine 660 Fifth Ave. from Vornado.

Uniqlo bought 1 17,250-square-foot information of nan unit condo, for $350 million. The woody prices nan abstraction astatine $20,237 per ft — and gives them a everlastingly home.  

At nan guidelines of nan caller Mandarin Oriental Residences astatine 685 Fifth Ave., brokers are trading everlastingly homes to large manner houses. It’s presently lodging brands for illustration Coach and Tag Heuer. Zandy Mangold

“Smart retailers are saying earlier nan rent gets retired of power again, fto maine ain it,” said Steven Soutendijk of Cushman & Wakefield. “We person nan lowest readiness since 2011 aliases 2012.”

In nan guidelines of nan caller Mandarin Oriental Residences astatine 685 Fifth Ave., brokers astatine Newmark have been trading spaces occupied by Coach, Stuart Weitzman and Tag Heuer connected behalf of proprietor Brookfield. Other brokers suggest since LVMH is seeking spaces connected Fifth Avenue, it could make an offer.

“The large manner houses want nan guarantee that they will person a awesome beingness connected a awesome area successful perpetuity,” said Matt Chmielecki of CBRE. 

Ikea is DIYing its early shop astatine 570 Fifth Ave. by investing successful nan building of nan caller tower. INGKA

It’s a akin communicative downtown wherever Adelaide Polsinelli of Compass has 2 restaurants and some streetwear brands that want to bargain locations successful Little Italy and Soho. “Space is constricted successful Soho and prices are going up,” she said.

Investor Isak Andic’s institution bought a 19,000-square-foot shop occupied by Cotton On astatine 512 Broadway (56 Crosby St.) for $26.9 million. Nearby, astatine 597 Broadway (170 Mercer St.), nan Jackson Group paid $6.25 cardinal for a store. Meanwhile, tegument attraction brand Caudalie spent $9.7 cardinal to bargain a vacant shop astatine 130 Greene St. 

But Ikea’s genitor institution is genuinely DIYing it: Not only is it buying 70,000 quadrate feet — that will apt location a shop — successful nan guidelines of Extell’s caller agency building astatine 570 Fifth Ave. astatine W. 47th St., it’s besides investing successful nan project. 

“It’s a very beardown awesome that retailers are sending to New York and nan marketplace by committing to New York and spending truthful overmuch superior to power their existent estate,” said Soutendijk. 

But it’s not conscionable large food gobbling up spaces. Smaller retailers are besides buying. 

Bernadette Brennan, of Serhant Commercial, sold 2 mini unit condos successful nan guidelines of a caller residential building astatine 165 Lexington Ave. connected nan area of East 30th Street for astir $1,400 per ft to owner-users. She has 1 near to go. “Both were sold to nan owners of mini businesses who wanted to ain alternatively of lease,” Brennan said. “We are seeing a desire for ownership.” 

Along pinch not paying “the exorbitant unit rents successful Manhattan,” location are besides taxation advantages to ownership, Brennan said. One of nan unit condo buyers had sold different spot and utilized nan national 1031 tax-free speech proceeds to plow into nan caller store.

Religious groups, childcare companies, different non-profits and backstage schools, which don’t salary existent property taxes, are besides successful a stronger position to bargain space, said Polsinelli. 

“I person 1 connected nan marketplace wherever nan taxes were done nan tile and 2 non-profit users want it,” said Polsinelli of Compass. “They tin salary much because they don’t person to facet successful nan existent property taxes.”  
 
But nan unit buying spree isn’t only being spurred by owner-users.

Investors are driving income of occupied spaces, too. “Investors want to person nan expertise to cod income from tenants and not conscionable person a vacant space,” Brennan said.