Was 2016 a year for New York City trophy deals or were they just relocations? by Joseph Aquino

Joseph Aquino
Joseph Aquino Commercial Real Estate Services LLC

Was 2016 a year for trophy deals or were they just relocations?

With the news that Ralph Lauren will be closing their Fifth Ave. flagship after only two short years, one has to analyze some of the recent transactions to conclude was 2016 a year of trophy deals or just relocations.

On Madison Ave. alone, we saw many tenants shuffle from one space to another. Tom Ford moved from 845 to 688 Madison Ave., Bally Shoes moved from 628 Madison to 689 Madison Ave. Brioni moved from 57 East 57^th to 680 Madison Ave. Jimmy Choo walked away from their famous “Sex in the City” store at 716 Madison Ave. to 699 Madison Ave. and then DeBeers hopped into Jimmy Choo’s space which they just departed.

We had a couple of tenants who simply moved across the street. For example, Harry Winston location at Fifth Ave. and 56^th St. moved across the street to Fifth Ave. and 55th St. Breitling moved from 5 East 57^th to 30 East 57^th St.

We saw Bottega Veneta move off Fifth Ave. altogether. They left 699 Fifth Ave. to move to a temporary space at the former Crate & Barrel store at Madison Ave. and 59^th St., only to plan to move again to their permanent home at 740 Madison Ave., five blocks north. Hickey Freeman also decided to move two blocks, this time south to 501 Madison Ave.

Here are some more Fifth Ave.transactions:

Victoria Secrets which is no stranger to New York City took the old H&M location at 51 St. Nike made a move to the Juicy Couture space at 642 Fifth Ave. at 52^nd St. They did not announce yet if they will close their flagship store at 57^th St. If they do close 57^th St., we will count this as a relocation as well. H&M moved South of Saks (SOS) to a much more  affordable location at the 48^th St. corner at no. 589 and Victoria’s Secret took the old H&M space. Sephora moved from the Scribner Building to 580 Fifth Ave. at 47^th St. spearheading the Jewelry District.

Some new deals on Fifth Ave. were Armor All, Asics and Intimissimi Lingerie, all done in the last two quarters.

One has to conclude, was all the movement due to poor sales, escaping higher rents or did the future location really show that much more potential, or all three. Either way, I predict that since Ralph Lauren announced they will part their Fifth Ave. location there will be an adjustment in rents in favor of the tenant/s.

Joseph Aquino is the proprietor of Joseph Aquino Commercial Real Estate Services LLC, New York, N.Y.