Prada Buys 724 Fifth Avenue for $425M From Jeff Sutton
By Mark Hallum December 20, 2023 12:20 pm
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Italian luxury fashion house Prada will get into the landlord business and purchase Wharton Properties’ 724 Fifth Avenue, the longtime home of its New York City flagship store, according to the company.
Prada will pay Jeff Sutton’s Wharton $425 million for the building in the hopes that it will benefit from future retail prosperity in Midtown as well as secure the future of its five-story flagship it has had in the property since 1997, according to the company.
“The board believes that the Property’s location offers high strategic value being characterized by increasing scarcity and long-term potential,” Prada said in a statement. “Furthermore, the area in the immediate vicinity of the property has recently seen an influx of significant investments that have further improved the residential, hospitality and retail appeal.”
Will Silverman and Gary Phillips of Eastdil Secured represented Wharton in the deal, according to a source, but declined to comment.
The new deal lets Prada avoid leasing the store from Sutton as the two have had a tense relationship that rivals some of Miranda Priestly’s melodrama over cerulean blue sweaters. In 2019, Prada sued Sutton after it claimed it was supposed to get $5 million and a $25 million letter of credit since its 17,501-square-foot flagship will be displaced when Sutton renovated the property, The Real Deal reported.
Prada then claimed that after getting a 2020 deadline to move its spot, Sutton allegedly reneged on the deal and kept up scaffolding on the neighborhood 720 Fifth Avenue Prada claimed damaged its business.
An appeals court decision from last year ruled that Sutton only had to pay Prada’s legal fees and avoided the other costs.
Sutton owned the 12-story office and retail building with SL Green Realty since 2012 and in 2018 paid $85.5 million for SL Green’s 50 percent stake. In January, Wharton was able to get a $260 million loan from German lender Aareal Capital Corporation with a term of two years, TRD reported, but now Prada is saying “Arrividerci!” to the landlord
Sutton did not immediately respond to a request for comment.
Mark Hallum can be reached at mhallum@commercialobserver.com.
