RELATED Cos. is negotiating with several tenants at One Union Square South for the Virgin Megastore space, sources said.
The chain, which was purchased by Related and Vornado Realty Trust in 2007, is closing the store in late May or early June. All US-based Virgin Megastores are due to shut down by the summer.
Related controls the Union Square outlet, while Vornado handles the one in Times Square, which is closing in April to make way for Forever 21, the retailer that signed a megadeal for 100,000 square feet.
The two real-estate giants licensed the then 11-unit Virgin chain precisely so they’d be able to control the retail in their buildings.
Sources said the asking rent in Union Square has recently dropped to $15 million per year from $25 million. According to its CoStar Group flyers, Winick Realty is seeking $700 a foot for the 26,000-foot ground floor and $150 a foot for the 31,035-foot lower level.
One Union Square South, at 52 E. 14th St., includes the hulking Metronome artwork on the lower north side of the luxury apartment tower that rises from the retail base.
Some of the prospective tenants include CVS and Best Buy, which has its eye on the Circuit City space now being controlled by the bankruptcy court.
Last fall, Related signed a letter of intent with Nordstrom Rack for about 40,000 feet. But Nordstrom in the end was reportedly loath to bring its off-price success story into the Big Apple before it snagged an A-plus site for the upscale department store flagship and nixed the Union Square opening.
A Nordstrom spokeswoman said, “We will keep looking for a great spot to serve our customers.”
There is also talk that Forever 21 might jump from Vornado’s Whole Foods building at 40-48 E. 14th St., which also hosts Filene’s Basement, and expand into 19,200 feet at One Union Square.
The Forever 21 store, which opened right after 9/11, has seven years left on its deal. But a buyout doesn’t make sense in the current economic climate.
Related and its broker, Jeffrey Winick of Winick & Co., declined to comment.
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Chipotle Mexican Grill will be spicing up 501 Seventh Ave.
The chain signed a lease for 4,824 feet on the ground and mezzanine levels of the Herald Square area tower.
Fred Posniak of W&H Properties worked in-house for the owners along with Andrew Goldberg, Eric Gelber and Matt Chmielecki of CB Richard Ellis.
“We had four offers for the space and we cherry-picked the best one for the office tenants,” said Posinak.
Jeffrey Roseman and Kenneth Hochhauser of Newmark Knight Frank brought in the winning tenant at close to the asking rent of $150 a foot.
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Los Angeles-based Gehr Development Co. closed on its purchase of the city’s newly built Fairfield Inn by Marriott for $99.5 million.
The deal, signed with the Lam Group developers in July 2007, also calls for Marshall Management to handle the property at 330 W. 40th St. The city’s first Fairfield Inn has 244 rooms and four suites and is Gehr’s first city investment and first hotel property, said CFO David Lifschitz.
The hotel is now in a “soft” open mode.
Also just opened and sold is the Hilton Gardens Inn at 63 W. 35th St., which Brack Capital developed on a parking lot.
Brack contracted to sell it to RLJ Development for nearly $123.1 million on Jan. 31 and closed on the deal Feb. 24, public records show.
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Donald J. Trump and his Chicago hotel tower lender, Deutsche Bank, have called a truce on their mutual lawsuits. Trump said the “economic tsunami” had triggered his “force majeure” clause, allowing him to slack off loan repayments.
