Jeff Sutton’s Wharton Properties and General Growth Properties re-signed luxury retailer Bulgari to a new, 15-year deal at the Crown Building at 730 Fifth Avenue in Midtown, GGP said in its third-quarter earnings call last week.
Bulgari signed a new lease “at market rents,” GGP CEO Sandeep Mathrani said, and will “continue their corner presence” at the Crown Building’s prime retail location of 57th Street and Fifth Avenue.
The tenant moved to the high-profile corner after acquiring the lease in 1988, following the bankruptcy of the prior tenant at the location.
But the Rome-based luxury goods brand will be downsizing its space at 730 Fifth Avenue, taking less than its current 3,675 square feet on the ground floor and giving up its approximately 6,000 square feet of upper-level retail, according to sources.
The new terms were agreed upon late last month, with no brokers involved in the transaction. The retailer is also expected to draft noted architect and “leather daddy of luxury” Peter Marino — who designed luxury brand Fendi’s new Midtown flagship one block away, at 598 Madison Avenue — to helm a redesign at 730 Fifth Avenue.
Neither GGP nor Sutton could be reached for comment. Bulgari parent company LVMH and Marino did not return requests for comment.
GGP partnered with Sutton to acquire the Crown Building for nearly $1.8 billion earlier this year. The transaction set an all-time record for price paid per square foot for an entire office building — $4,564 per square foot for the 390,000-square-foot property.
While Mathrani said GGP’s “pens are down in terms of new acquisitions” for the time being, the Chicago-based firm has considered “recycling” assets and putting them up for sale – among them 522 Fifth Avenue, which GGP co-owns with Ashkenazy Acquisition Corp. and Deka Immobilien Investment.
“We may debate 522 Fifth Avenue,” Mathrani said. “Stay tuned. We’re not against it. We’ve thought about it.”
As for Fifth Avenue retail at large, Mathrani noted that “there is little or no vacancy left” in the vaunted corridor, which commands among the highest retail rents in the world.
Average asking rents in the Fifth Avenue retail corridor between 49th and 59th streets were $3,683 per square foot as of this spring, according to the Real Estate Board of New York’s most recent retail report.
“The only building that’s actually vacant is 685 Fifth Avenue,” Mathrani said. “We’re trading paper with retailers and it takes some time to get signed, but that would be the last vacancy on Fifth Avenue between 51st Street and 57th Street.”