Jeff Sutton

Those who doubted the future of New York real estate were knocked for a loop in January when word came out about two deals from the legendary real estate owner Jeff Sutton that together were worth $1.8 billion and which almost single-handedly scrambled New York’s real estate narrative.

Luxury retail has been a play that worked out particularly well for Sutton, and nothing better illustrated this than the sales made to Prada and Kering on Fifth Avenue that fetched the aforementioned price. These headline-grabbing deals underscored a major trend in commercial real estate: operators putting serious money down on the spaces they occupy.

Sutton started down this particular path in August 2023 when he and his partners, brothers David and Simon Reuben, sold the retail components of 747 Madison Avenue to vacuum mogul James Dyson for $135 million. It was probably Sutton’s biggest deal since he sold almost all of his stake in Manhattan’s Crown Building to Brookfield for about $400 million in 2019. 

The building at 747 Madison sold far above the price Sutton bought it for in 2011, and fetched well above what it had been appraised for.

Fast-forward to December, and Prada was considering buying Sutton out of 724 Fifth Avenue where it had leased its New York City flagship store since the late 1990s. Sutton just happened to be on a trip to Milan around the same time, and ended up inking an all-cash deal with Prada for the property for $425 million.

The negotiations in Milan took a single day.

Prada around the same time also bought Sutton out of 720 Fifth Avenue for $410 million. That deal included an annex on East 56th Street, a piece of the Crown Building he had managed to hold onto from 2019.

But it got even better for Sutton. Kering, the company that owns Gucci, Balenciaga and Alexander McQueen, made a deal with him in Milan to take 715-717 Fifth Avenue off his hands for $963 million.

The deals reverberated through the real estate community, and they also vindicated government officials looking to develop infrastructure with retail and office components. Rick Cotton, executive director of the Port Authority of New York and New Jersey, in announcing the redevelopment of the Port Authority Bus Terminal, said that it was clear the real estate market was not as treacherous as it appeared. After all, Cotton said, consider the Kering sale.