General Growth Properties and Thor Equities are waiting for the paint to dry on Nordstrom’s new Midtown department store before redeveloping the longtime home of the iconic Lee’s Art Shop across the street.
The real estate investment companies plan to hold off on permanently leasing the 22,000-square-foot property at 218-220 West 57th Street until closer to 2019, when Nordstrom is slated to open a new department store across the street, CEO Sandeep Mathrani said Tuesday in a second-quarter earnings call.
Waiting until 2019 allows the firm to maximize rents by capitalizing on the buzz surrounding the new department store.
“One has to be very patient and not rush to lease it,” Mathrani said of the property. “It’s part of our inventory to hold. We might temp lease it, but we are not going to permanently lease it.”
In June, GGP and Thor closed on their $81.5 million purchase of the 22,000-square-foot building across the street in June, following about two years of litigation brought by another company that had sought to buy the property. The partnership plans to invest approximately $20 million into upgrading the property, Mathrani said. The building offers 126,000 buildable square feet.
GGP is just one of many investors betting that, with developers seemingly locked in a battle to build the tallest condo tower on Billionaires’ Row, the retail on the Midtown stretch will inevitable see some upside.
The Nordstrom store, the retailer’s first full-line retail location in Manhattan, is expected to open at the foot of Extell Development’s Central Park Tower. It will total 363,000 square feet.