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Kering’s $963M 5th Ave Acquisition: Third Major Success for Developer Jeff Sutton
Edited by: TJVNews.com
In a significant move that is set to reshape the landscape of luxury retail on New York’s iconic Fifth Avenue, Gucci’s parent company, Kering, recently acquired a prime retail property for a staggering $963 million, as was reported by the New York Post on Monday, The purchase of the 115,000 square-foot space at 715-717 Fifth Ave. is not only a strategic move by Kering but also has potential ramifications for rival fashion house Armani, which currently occupies the flagship location.
The acquisition took place on Monday in the heart of Manhattan, at the base of the Corning Glass Building, a 28-story office tower. As was noted in the Post report, this latest transaction marks the third major success for seller Jeff Sutton, a prominent retail developer and landlord, who orchestrated the sale of both 720 Fifth Ave. and 724 Fifth to Prada for a combined total of $835 million just a month prior. These transactions were noted as the city’s largest combined investment-sale transactions in 2023.
Kering emphasized that the purchase of the Corning Glass Building is a strategic step in its selective real estate strategy, aimed at securing key and highly desirable locations for its prestigious fashion houses. According to the information provided in the Post report, the move is indicative of the trend among major retailers to acquire Midtown Fifth Avenue properties for their own use, following in the footsteps of Prada, LVMH, Rolex, and Harry Winston, among others.
A noteworthy aspect of these acquisitions is the dominance of foreign companies among the buyers. The report in the Post said that Joanne Podell, a retail power-broker at Cushman & Wakefield, highlighted that most buyers are foreign, possibly driven by the European approach of investing in long-term interests in retail properties. Podell added, “They don’t have to deal with lease expiration dates. Of course there is innate value in buying on the most important retail street in the world.” The allure of purchasing on the “World’s Greatest Shopping Street” is undeniable, with intrinsic value associated with the location’s prominence.
With the acquisition by Kering, questions arise regarding the fate of Armani’s flagship location at 717 Fifth Ave. Armani’s lease, signed in 2007, is rumored to be expiring soon. While the impact of the sale on Armani’s current space remains unclear, the renowned fashion house is preparing to open a new store and restaurant at 760 Madison Ave. in partnership with SL Green, as was indicated in the Post report.
As per the report in the Post, SL Green chief investment officer Harrison Sitomer said, “This disposition represents another successful investment in our partnership with Jeff Sutton. The transaction is yet another example of how well-located assets continue to generate demand for global investors across cycles.”
Another fashion rival, Dolce & Gabbana, also has a large store at the location. The Post also reported that Kering’s lines in addition to Gucci include such internationally renowned fashion houses as Saint Laurent, Balenciaga and Alexander McQueen.
This move signifies a strategic shift for Armani, navigating potential changes in the Fifth Avenue landscape.
The shifting dynamics of Fifth Avenue reflect the continual evolution of New York City’s retail landscape, with global players making significant investments in the pursuit of prestige and prominence.
