Vornado Realty Trust has agreed to sell off five struggling retail properties in Soho and the Upper East Side for $184.5 million, resulting in a loss of about $7 million.
The New York-based real estate firm, led by Steve Roth, is selling properties at 677-679 Madison Avenue, 759-771 Madison Avenue, 828-850 Madison Avenue, 478-482 Broadway and 155 Spring Street, according to a statement from the company. Vornado declined to comment beyond the statement.
Vornado, which didn’t disclose the buyer, said the properties have “negative income” and occupancy stands at just 30 percent.
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New York
Madison Avenue's shopping sorrows
The properties are being sold in three separate transactions. The sale of the Madison Avenue properties is expected to close in the third quarter, while the Soho ones are expected to close in the first quarter of 2022, according to Vornado.
The pending sale could be another signal of the demise of street-level retail on Madison Avenue. The iconic shopping corridor, which stretches from 57th Street to 72nd Street and has historically commanded some of the priciest retail rents in the city, has just 71 percent of its 2019 foot traffic, according to a recent estimate from location analytics firm Orbital Insight. Madison Avenue has a number of vacant storefronts and an availability rate of 39 percent, the highest in Manhattan. Some of the challenges can be attributed to Covid-19 and a decrease in tourism.
677-679 Madison Avenue (Google Maps)
Soho has also been hit hard by the pandemic. In a sign of just how much the market has fallen, the valuation of Thor Equities’ 6,600-square-foot building at 470 Broadway has plummeted to $5.6 million in April from $29.2 million nine years ago, according to Trepp, a data provider that tracks mortgage-backed securities.
Vornado owned 20.6 million square feet of Manhattan office space in 33 properties, along with 2.6 million square feet of Manhattan street retail space, according to its 2020 letter to investors.