Ikea is coming to Fifth Avenue.
Ingka Investments, part of the Ingka Group and the largest franchiser of the Swedish retail chain, is partnering with Gary Barnett’s Extell Development at its new 570 Fifth Avenue tower. Ingka Investment will own 80,000 square feet of retail space in the tower and a one-third stake in the remainder of the building, in addition to preferred equity, Bloomberg reported.
The firm said the Fifth Avenue retail space is slated to include a “customer meeting point,” but details of the plan for the space remain unclear.
Will Silverman and Gary Phillips at Eastdil Secured brokered the deal.
Ikea joins other popular retailers signing on to occupy coveted retail space along the popular avenue this year, including Prada at 730 Fifth Avenue and Gucci at 717 Fifth Avenue.
A statement from Ingka Group said the deal marked “a significant step in Ingka Group’s long-term strategy to enhance its city center retail presence.”
Ingka Group has increasingly built out its metropolitan portfolio in recent years, adapting Ikea’s warehouse model to more compact retail spaces closer to customers.
The Wall Street Journal reported in February Ingka Group was buying up troubled malls with plans to anchor them with Ikeas and draw additional crowds with its brand of co-working spaces, Nordic-inspired food halls and children’s play areas. Smaller Ikea stores can now be found in the center of cities like London, Paris and, as of last year, San Francisco.
Ikea announced last year that it was expanding its American presence by 17 stores over the next three years with a $2 billion investment from Ingka Group.
Just last year, Extell Development secured a new lender on the 13-parcel Fifth Avenue development site, after Seoul-based IGIS Asset Management acquired a $185 million loan on the property.
Extell Development will keep a two-thirds stake in the Fifth Avenue tower, which is scheduled for completion in 2028.
— Emily Davis
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