Ben Ashkenazy and Michael Alpert’s Ashkenazy Acquisition — together with the Germany-based Deka Immobilien Investment — have purchased two condominiums that make up the retail portion of 522 Fifth Ave. at West 44th Street for roughly $170 million, or just over $6,400 per square foot.
This one seems cheap compared to those previously made in the prime Fifth Avenue blocks between 49th and 57th streets because the rents south of 49th Street are lower but growing, and the buyers may need to spend up to $30 million to redo the storefronts and increase the square footage.
To attract new and higher- paying retailers for the buyer, the offering memorandum states seller Morgan Stanley hired Gensler architects and approved two possible design schemes that could cost between $22 million and $27 million, plus downtime.
Both would expand the current two storefronts to create 26,554 square feet on two levels with at least three stores. The facade would either get new glass or a more expansive upgrade.
Either design would create new storefronts on both sides of the grand and columned 19-foot-9-inch-high front-covered entry along with a 16,334-square-foot second floor with 17-foot-9-inch ceiling heights, now occupied by the investment firm.
The current Camper store pays $410 a foot for 2,060 square feet just south of the entrance under a lease that ends in January 2023, the memo states. Orvis has the 6,351-square-foot store on the north corner at West 44th Street until this month at a rent of $142 per square foot.
The future occupant of the Orvis store would eventually have a 23,952-square-foot duplex flagship while a new jewel-box store of 542 square feet would be added between the lobby and Camper.
The CBRE team handling the transaction includes Darcy Stacom, Bill Shanahan, Paul Gillen, Marcella Fasulo and Ryan Spector.
Morgan Stanley confirmed Tuesday’s sale, but no one from any of the companies responded to requests for further information or comment.
The deal is made possible because shopping-frenzied New Yorkers and tourists from all over the world have sent cash registers ka-ching-ing along with the value of the stores. Sources tell us ground-floor leases in the immediate area are being signed at rents north of $1,200 a square foot.
“The current retail façade is not typical and the changes will make a difference,” said Robert K. Futterman of RKF, a retail broker that was not involved in the deal. “It’s a great location.”
And commuters racing to catch a train at Grand Central should have no worries: The landmarked black freestanding clock on the sidewalk still belongs to Morgan Stanley and will remain in place.
In another building sale targeted toward a future retail play, sources tell us Tishman Speyer Properties has just purchased 183 Madison Ave. together with just-created partnership The Cogswell-Lee Development Group for $185 million, or $674 per square foot. The seller was the Argentinian investment company IRSA.
The 19-story landmarked Art Deco building is on the southeast corner of East 34th Street and “L’s” around through the block to East 33rd Street.
The 274,413-square-foot office property designed by Warren & Wetmore in 1925 was known as the Madison-Belmont Building. It has an ornate marble and bronze lobby with a multicolored barrel-vaulted ceiling and design elements from ancient Greece, Rome and Egypt.
Developed as a home for the silk industry, it still houses numerous intimate-apparel fashion tenants. TSP is expected to target the building toward tech, advertising, media and Internet (TAMI) companies.
While those rents will slowly roll into higher-paying tenants, the big dollar bump will be in 2020, when the 20,000-square-foot retail lease for modern furniture store Domus Design Collection comes to an end along with its $30ish-per-square-foot rent. Current market retail rents for this area are $150 to $200 per square foot and rising.
In 2007, the building was purchased by Rock New York for $107.5 million. After the market fell, it sold in 2010 for $85.1 million to Rigby Asset Management along with IRSA (Inversiones y Representaciones Sociedad Anónima), which gradually took over 100 percent ownership as Peter Armstrong’s Rigby began focusing on developing the garage at 17 E. 12th St. into a luxury condominium building.
IRSA currently owns the Lipstick Building, which was previously owned by Tishman Speyer.
All the parties declined comment.
In case you missed Tuesday’s news, law firm powerhouse Weil Gotshal Manges signed a 400,000-square-foot, 15-year extension of its current lease at the GM Building at 767 Fifth Ave. and will renovate and consolidate onto 10 floors.
The upcoming 2019 end of its current, way-below-market deal along with law-firm partner thrift had left a big question mark hanging over the Boston Properties-owned building, which now gets rents that can soar to $150 a square foot and up for much smaller digs.
Weil and Boston Properties were each repped by CBRE teams.
