[NEW YORK] SL Green Realty Corp is preparing to market 609 Fifth Ave, the midtown Manhattan office and retail building that houses the American Girl Place toy store.
The 156,000-square-foot (15,000-square-meter) building on 49th Street may fetch about US$600 million, based on nearby comparisons, reflecting demand for retail properties on the high-rent area of Fifth Avenue. The lease with Mattel Inc's American Girl expires in early 2018, offering an opportunity for a buyer to boost rents, said Darcy Stacom, a vice chairman at brokerage CBRE Group Inc, which is representing the seller.
"This is perfect high street retail," Mr Stacom said. "It's across the street from Saks Fifth Avenue and catty-corner to Rockefeller Center. This is the anchor of the gold coast." SL Green, New York's biggest office landlord, has been looking to sell properties as it prepares to complete its US$2.29 billion acquisition of 11 Madison Ave, a Flatiron district landmark that houses Credit Suisse Group AG. The real estate investment trust also is marketing Tower 45, a 440,000-square- foot office building on West 45th Street just east of Times Square.
Rick Matthews, an SL Green spokesman, said the Fifth Avenue property is one of a number of "mature, non-core assets" that the company would have sought to sell even without the 11 Madison deal.
"The 11 Madison acquisition is not driving the properties being put on the market," he said. "But the acquisition certainly fits well with the planned dispositions between now and the end of the year." 'Extremely Hot' SL Green is looking to capitalize on rising real estate values along Fifth Avenue, according to Mr Matthews.
"Demand for retail space on that part of Fifth Avenue continues to be extremely hot, and there's no indication it's going to subside in the near future," he said.
American Girl has "no immediate plans to leave our current location," said Alex Clark, a spokesman for El Segundo, California-based Mattel. "When our lease is up in 2018, obviously, we'll have to explore our options. Manhattan has been a very successful market for us and we hope to be there for a while." In addition to selling the company's trademark US$115 dolls and related accessories, the store features special events, a cafe that hosts afternoon tea and birthday parties, and a doll hair salon, according to its website.
Last month, toy retailer FAO Schwarz said it will close its Fifth Avenue store in July, ahead of the 2017 expiration of its lease, amid rising rents in the neighborhood.
Other tenants at 609 Fifth Ave. include DZ Bank AG and Reebok International, according to SL Green's website. DZ Bank extended its 29,500-square-foot lease in 2013 for 10 years, the landlord said in a statement at the time.
The building is 81 per cent occupied, generating annual rent of US$14.2 million, including US$8.9 million from its retail space, according to an April 22 SL Green regulatory filing. The company acquired the building in June 2006 for US$182 million.
The offering also includes about 50,000 square feet of development rights, Mr Stacom said.