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By January, Donna Karan International will vacate its roughly 50,000-square-foot space on the 14th through 17th floors of the Adler Group’s 550 Seventh Avenue, which highlights a change in the real estate world.
The 24-story Art Deco building between West 39th and West 40th Streets in Midtown is a fashion hub, housing a variety of brands, including Ralph Lauren, Mavi Jeans, Jill Stuart, Morgan Lane and 34 Heritage. This mix is a result of the old trend where fashion companies would crowd the same building to create destinations.
However, when Donna Karan leaves, the landlord is hoping to attract creative tenants not of the fashion industry for the space. They noticed that fashion tenants have spread around the city and new creative tenants offices are becoming more popular.
“Donna Karan has been a great tenant and we are sad to see them leave, but we are excited to test the market for creative tenants,” Kristen Fisher, president of the Alder Group, told Commercial Observer. “We think that the fashion world is changing and that there isn’t that need to be in one location. We want to catch up with the times.”
Simpson Gumpertz & Heger, a engineering firm that signed a lease to move into 550 Seventh Avenue in 2013, was the first non-fashion related firm to take space in the building, as CO reported at that time.
Kaufman Organization, which is marketing Donna Karan’s space, is hoping to fill the space with a mix of creative tenants, which include anything from technology to architecture firms. There is also the possibility for one tenant to take the full block of space. Asking rents for the Donna Karan space is $60 per square foot.
The four full floors of space, which was fitted for fashion tenants, will be redesigned. Renderings for the space show the potential for modern offices with bright open-plan floor plates, high ceilings and glassy private rooms. The building’s location in Time Square with frontage on 41st Street is another attractive feature.
Kaufman Organization’s Michael Heaner, who is overseeing leasing of the building, said they are hoping to move new tenants into the spaces in the first part of 2016.
If prospective tenants needed another reason to take Donna Karan’s space, they can count on landlord stability. The Adler family has owned the building since Louis Adler built it in 1925. Ms. Fisher said the family has no plans to sell the tower and will continue to revitalize it in the future.
“In this day and age when everything is being flipped and you don’t know who is going to be your landlord, we don’t plan to go anywhere and I think that is very important,” Ms. Fisher said. “It is truly a partnership.”
