The purchase price comes to $28, 340 per square foot, not quite as high as the $31, 333 a square foot Chanel SA paid for its Upper East Side space.
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Vornado Realty Trust (VNO) is buying the retail area of the St. Regis Hotel on Manhattan’s Fifth Avenue for an estimated $700 million, giving them access to one of the world’s most expensive shopping strip, Bloomberg reported.
Vornado and Crown Acquisitions, a New York property firm specializing in retail space, are both owned by Jews. Stanley Chera is a New York real estate developer and founder of Crown Acquisitions. The 80 year old Syrian Sephardic Jew is the son of a successful retailer who founded Young World, which bought the buildings in which its stores were located as it expanded. In the 1980s, when Chera took over the family business, he began the acquisition of New York real estate and is known for developing or repositioning the retail portion of his buildings and then selling the property.
Steven Roth, 72, born to a Jewish family in the Bronx, is co-founder, Chairman of the Board and Chief Executive Officer of Vornado Realty Trust and chairman and chief executive officer of Alexander’s. He has a B.A. from Dartmouth College and an M.B.A. from the Tuck School of Business at Dartmouth. He has served as a trustee of the Jewish Theological Seminary in New York.
The deal will include 100 feet of storefronts on Fifth Avenue at 55th Street, as well as an adjacent retail townhouse.
The St. Regis space is leased to Kering SA (KER)’s Gucci division, featuring its Bottega Veneta brand, and to LVMH Moet Hennessy Louis Vuitton SA (MC), featuring a De Beers store. Kering’s lease expires in January 2016, and LVMH’s in 2019.
The purchase price comes to $28, 340 per square foot, according to Real Capital Analytics Inc. The U.S. record is $31, 333 a square foot, which Chanel SA paid for its Upper East Side retail space earlier this year.
Vornado will own between 67 an 80 percent of the Fifth Avenue property, Crown gets the rest, depending on how much debt the partners obtain and on Crown’s short-term option to invest additional capital, a Vornado press release stated.
Vornado is one of the biggest owners of Manhattan street retail, with 2.8 million square feet (260, 000 square meters) divided into 63 properties, including 689 Fifth Ave. right next door to the St. Regis.
Gil Tanenbaum contributed to this report.