Gucci Owner Kering Buys Fifth Avenue Retail Condo for $963M
By Abigail Nehring January 22, 2024 7:19 pm
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Never bet against Fifth Avenue.
Kering, which owns brands Gucci, Balenciaga and Yves Saint Laurent, spent $963 million on a Fifth Avenue retail condominium, the latest luxury retailer to drop serious coin on a property on the block, Kering announced Monday.
The French company bought the 115,000-square-foot retail portion of 715-717 Fifth Avenue from Jeff Sutton’s Wharton Properties and SL Green Realty.
Italian luxury fashion houses Giorgio Armani and Dolce & Gabbana currently occupy the ground-floor units at the bottom of a 26-story office tower on the corner of East 56th Street and Fifth Avenue.
A source with knowledge of the deal said Kering likely will use the property as a new home for Gucci, which has a flagship across the street in Trump Tower at 725 Fifth Avenue.
Sutton and a spokesperson for Kering declined to comment.
“The transaction is yet another example of how well-located assets continue to generate demand for global investors across cycles,” SL Green’s Chief Investment Officer Harrison Sitomer said in a statement.
Eastdil Secured’s Will Silverman and Gary Phillips brokered the deal. Silverman and Phillips declined to comment.
Sutton owns about 120 retail properties in New York City and two of them fetched eye-popping prices across the street last month. Prada purchased 724 Fifth Avenue and 720 Fifth Avenue from Sutton and SL Green in a single transaction at the end of last year. But the $963 million deal takes the cake.
The high cost of capital over the past two years has made the New York market more friendly to owner-occupiers. Korean automaker Hyundai Motor Company cracked the top 10 investment sales in the city last year when it bought 15 Laight Street for $274 million in an all-cash deal.
Sutton bought 715-717 Fifth Avenue in 2004 and SL Green acquired a minority interest in it in 2006, according to The Real Deal and SL Green. SL Green sold half of its stake in 2012, retaining 10.9 percent, which valued the building at $618 million. Wharton has been fending off foreclosure on the property since 2022, Crain’s New York Business reported.
Chinese company Anbang Insurance Group has owned the office portion of the building since 2014, spending $415 million for it, as Commercial Observer previously reported.
Abigail Nehring can be reached at anehring@commercialobserver.com.
