NEW YORK CITY—A partnership of General Growth Properties and Jeffrey Sutton's Wharton Properties has made a pre-emptive strike on a planned auction of the Crown Building at 730 Fifth Ave., published reports say. Bloomberg reported Friday that the partnership would pay $1.75 billion for the property, largely on the strength of its retail space. The acquisition is believed to set a world record for a single office building at $4,490 per square foot.

The New York Post reported Thursday that the 390,000-square-foot trophy at the corner of 57th Street and Fifth garnered worldwide interest after Eastdil Secured's Doug Harmon and Adam Spies began marketing it earlier this month. However, GGP and Sutton moved quickly to acquire the property from the Spitzer and Winter families.

Although primarily an office property, it's the approximately 50,000 square feet of retail space along the world's most expensive shopping corridor that gives the Crown Building its appeal. Its retail tenants include jewelers Bulgari SpA and K. Mikimoto & Co.; its neighbors include Tiffany & Co., Louis Vuitton and Bergdorf Goodman.

Cited sources said to be familiar with the transaction, Bloomberg reported that most of the office and retail tenants at 730 Fifth are paying rents well below the market. With about 90% of its leases expire within seven years, there are opportunities to boost the property's cash flow, Bloomberg reported. Among its office tenants are KKR, Apollo Global Management and men's designer Ermenegildo Zegna.

While Sutton and Wharton Properties have long been active investors in Manhattan retail, for GGP urban properties are a relatively new emphasis. In July, Sandeep Mathrani, CEO of the nation's second-largest shopping center owner, said urban storefronts “offer very compelling opportunities to create shareholder value.”

The current ownership paid $93.6 million for the 25-story 730 Fifth, then half-empty, in a 1991 court-ordered sale. The Post reported that the property was once owned by Fernando and Imelda Marcos before they were toppled in a Philippine military coup.