Thor sells 693 Fifth Avenue for $525M? $3000 PSF Lease?
So... it appears that Joe Sitt just dumped the Valentino property on 5th avenue for $525M after buying it for $142.5M in 2010. I'm perplexed by the ground floor retail lease that got signed with Valentino for $3,000 PSF.
As in $250 PSF per month x 19,600 SF = $4,900,000 in monthly rent? That's $58,800,000 in annual rent.....I understand that urban "high streets" like 5th avenue and Rodeo drive are essentially billboards for retailers but this is madness....Can someone please clarify/confirm this?! Am I missing something here?
See here: https://commercialobserver.com/2016/06/french-bil…
Nothing you're missing. See this article: https://commercialobserver.com/2016/05/thor-selling-693-fifth-avenue-at…
According to it, Coach is paying $4,000 PSF for their space on 5th Avenue. Retail on 5th avenue is extremely expensive. Can't comment on if it makes sense for these retailers, nor if CO has the correct numbers, but I would be surprised if these were incorrect. 5th Avenue is pricey.
See this article from 2013.
http://therealdeal.com/2013/05/09/valentino-to-pay-16m-rent-for-thor-sp…
It looks like they are considering that amount PSF ($3,000) just for the ground floor portion of the lease - meaning the approx 4,400-5,000 sf. As that article title states - they are paying $16m in rent annually, while still a lot - not $58m. I would assume the other floors occupied by Valentino are less than the ground floor rate.
Thank you @customer-service1, I was not thinking of the blended rate. Generally the ground floor is the most expensive, and the other floors are cheaper.
Okay that makes more sense. Still absurd though--I wonder what their sales are like out of that location? They have to be losing money there.
But I guess in the fashion world you're not a flagship brand if you don't have super high end locations? So it is just a "billboard" like I mentioned earlier
Buying for $150 million and selling for $525 million 6 years later is...absurd Someone made one hell of a bonus on that deal.
Yeah I'd like to see the promote on that one.
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