Retail’s back, baby.
At least, that was a major theme of Vornado Realty Trust’s fourth-quarter earnings call Tuesday.
“The retail apocalypse is passing,” CEO Steve Roth said. “We are absolutely convinced that rents are going to rise.”
A big part of that narrative appears to be luxury brands. A report by JLL in December found that luxury and athleisure retailers dominated leasing activity in urban corridors throughout the country.
Kering — which owns Gucci, Balenciaga and Alexander McQueen — and Prada recently bought their Fifth Avenue stores. These deals can be viewed a few different ways: The brands want to control their own destinies and hedge against future rent increases. They are also showing confidence in the longevity of Fifth Avenue retail.
Given Vornado’s extensive retail holdings on Fifth Avenue, and the financing challenges for some of those properties, the company’s executives are heartened by what the deals say about the corridor.
“We now have the most important retailers in the world investing aggressively in real estate for their own use, on the most important retail street in our country,” Roth said.
Last year, Vornado leased out nearly 300,000 square feet of space, getting an initial average rent of $118.47 per square foot. The weighted average lease term was 6.5 years. The company also sold four retail properties — 510 Fifth Avenue, 148-150 Spring Street, 443 Broadway and 692 Broadway — for $100 million.
What we’re thinking about: Will Vornado sell sites around Penn Station to another developer to build housing? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Jay Martin, executive director of the Community Housing Improvement Program, is launching a podcast, “Housing New York with Jay Martin.” The show, which will cover the intersection of housing and politics, is expected to debut later this month.
Elsewhere in New York…
— Police have identified the person who was fatally shot at a Bronx subway station Monday as Obed Beltran-Sanchez, Gothamist reports. Officers are looking for three shooters involved in the incident, which injured five others.
— Democrats spent $13.8 million on ads in the special election for Rep. George Santos’ seat, Politico New York reports. Republicans spent $8.1 million.
— Not only was Tuesday not a real snow day for NYC students, but it was a nightmare for parents, students and teachers alike. A technical glitch kept students and teachers from logging onto Zoom for remote learning Tuesday morning, Chalkbeat reports.
Wednesday’s data
Residential: The priciest residential closing Monday was $4.15 million for a condo at 500 Park Avenue in Midtown. The listing agents were Lauren Cangiano and Alisha Lloyd-Hudson of Brown Harris Stevens.
Commercial: The most expensive commercial closing of the day was $1.2 million for 3646 35th Street, a 2,900-square-foot industrial property in Astoria.
New to the Market: The priciest home to hit the market Monday was a condominium unit at 39 West 23rd Street asking $30 million. Corcoran Group has the listing. — Research by Matt Elo