NEW YORK CITY-Vornado Realty Trust late Thursday afternoon closed the loop on its previously announced acquisition of the retail condominium at 666 Fifth Ave., announcing that it had finalized the $707-million acquisition from a partnership of the Kushner Cos., Crown Acquisitions and the Carlyle Group. The REIT says the acquisition will be used in a like-kind exchange for income tax purposes for two completed asset sales and its previously announced $500-million sale of the Green Acres Mall in Valley Stream, NY, which is slated to be finalized in the first quarter of 2013.
The 114,000 square feet of 666 Fifth retail, leased to Uniqlo, Hollister and Swatch, expands Vornado's portfolio of Manhattan street retail to 2.3 million square feet. The office tower's retail space also includes the 38,750-square-foot former NBA store, which Spanish retailer Inditex bought in March 2011 for a record-setting $324 million.
The Inditex space was not part of the retail acquisition by Vornado, which GlobeSt.com first reported in July. Laast December, Vornado took a 49.5% stake in the office portion of the 41-story 666 Fifth, entering a joint venture with Kushner to recapitalize the property.
Taken together, the Vornado purchase and the Inditex space value 666 Fifth's retail component at more than $1 billion. That's nearly double the $525 million that Crown and Carlyle paid for a controlling stake in the retail condo in July 2008.
At an average of $2,690 per square feet, retail rents along Fifth Avenue between 49th and 59th streets remain the most expensive in Manhattan, according to the Real Estate Board of New York's Retail Report Fall 2012 released last week. The figure is down 5% from six months prior but up 2% year over year, according to REBNY.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
