If retail landlords didn't have enough problems already

David Goldsmith

All Powerful Moderator
Staff member

One of Soho’s priciest retail spaces sells at UCC foreclosure auction​

SL Green lost Spring Street property last year, after paying $80M for it in 2019​


One of Soho’s priciest retail properties, which SL Green Realty owned then lost, traded hands at a UCC foreclosure auction.
The roughly 6,000-square-foot retail space at 106 Spring Street, which has been vacant for years, sold to a Texas private equity firm earlier this month, Commercial Observer reported. The sale price was not disclosed.

The buyer, Paceline Equity Partners, called it a “unique asset” that could benefit from the post-pandemic economic recovery. CEO Sam Loughlin said the company has a “patient view of the recovery timeline for the Soho retail property market,” according to the publication.

SL Green bought the space in 2019 for $79.5 million from the Carlyle Group and 60 Guilders. The purchase price was a 25 percent discount from the $105 million those investors paid in 2016. SL Green had acquired a nearby retail space, 133 Greene Street, from the same sellers in 2018.
Citizens Bank was the lender on SL Green’s interest in both properties, and foreclosed on that interest, as well as the one at 133 Greene, late last year. The foreclosure triggered the UCC auction, which was originally set to happen in December.

Mezz lenders — which provide junior debt on real estate projects — are increasingly initiating UCC foreclosures on some major developments in need of “rescue funding.”
It was unclear how big Citizens’ mezzanine position was, but according to SL Green’s second-quarter financials, 106 Spring and 133 Greene streets carried a combined $53.5 million in senior and mezzanine debt as of late June.
 

David Goldsmith

All Powerful Moderator
Staff member
Soho "bounces back" with a deal at $73/SF where asking prices were $713 not much longer than a year ago.

Soho slowly bounces back with new retail leases​

Tenants drawn in by lower rents, favorable terms​

Like many of the city’s major retail districts, Soho has been hit hard by the pandemic, with foot traffic falling and landlords taking a hit on rents. But there are some signs of life in the neighborhood, with new leases being signed in recent weeks.
Notably, women’s clothing store Pinko inked a deal to take over a former Bed, Bath & Beyond at 143 Spring Street, the Wall Street Journal reported. The Italian brand will sublease the 4,925-square-foot retail space — a sign that retail subleasing may become more popular in the coming months, as stores sit empty.

Valentino SpA, another Italian clothing brand, also inked a deal to take over a more than 8,700-square-foot space near the Pinko flagship. Target also recently signed on to take 27,000 square feet at 600 Broadway,
Falling rents are helping lure retailers back to the ailing neighborhood. In the case of Pinko, the company is paying a yearly rate of about $73 per square foot to sublease the Spring Street space, according to the report. That’s a “significant discount” from what the main leaseholder pays, according to Alex Carini of the Carini Group, which helped broker the deal.

Asking rents along Manhattan’s main retail corridors have dropped dramatically as a result of the pandemic, with some neighborhoods hit harder than others. In Soho, asking rents along Prince Street fell in the fourth quarter of 2020 by nearly half, from $719 to $423 per square foot year over year.
 

David Goldsmith

All Powerful Moderator
Staff member

Believe it or not: Ripley’s, Modell’s, Liberty Theater abandon 42nd Street home​

Property now has nearly 65K sf of vacant space​

Just a year ago, the retail and entertainment complex at 234 West 42nd Street was a bustling part of Times Square, with Ripley’s Believe It Or Not, Dave & Busters and Applebee’s among the establishments anchoring the block between Seventh and Eighth avenues.
But in the wake of the pandemic, tenants have slowly emptied out of the building, and it’s struggling to regain its former glory.

The most recent casualties are Modell’s, Ripley’s Believe It Or Not and the Liberty Theater. The three spaces are currently being marketed as available to lease by Cushman & Wakefield, according to public property brochures. They would leave behind a combined 64,728 square feet of vacant space. A broker for the firm declined to comment.

Modell’s, which filed for bankruptcy last year, and the Liberty Theater have already closed their doors. Ripley’s Believe It Or Not was still open on a recent visit, and representatives for the company did not respond to a request for comment.

It’s not the first time that the prime Times Square property has been wounded during the pandemic. A Hilton Hotel at the same location closed permanently last year, and its owner, Sunstone Hotel Investors, turned the keys to the property over to one of its mortgage lenders in January. The hotel’s entrance is now surrounded by yellow caution tape.
Other businesses in the building, including an Applebee’s restaurant, have been closed due to the pandemic. The AMC Empire 25 movie theater was only given the green light to reopen in early March.
Times Square today is nothing like it was a year ago. Last January, the area was a hub of activity, with around 303,338 daily visitors on average. But in January 2021, foot traffic had fallen 70 percent to 89,856, according to the Times Square Alliance’s monthly pedestrian count.

That drop in foot traffic has resulted in bankruptcies, lawsuits and closures — and, consequently, hurt for landlords. The average asking rent per square foot in the area hit $1,643 in fall 2020, a 13 percent decline year-over-year, according to a REBNY retail report.
On a March 16 visit to the property, the Modell’s billboard on the front of the building was dark, as was the one for the Liberty Theater. Ripley’s still had some signs of life, with its doors swung open and videos of human wonders playing on its signage. Several visitors were inside taking pictures.
The Applebee’s, meanwhile, had a sign on its darkened storefront emblazoned with the words, “C’mon In.”
 

David Goldsmith

All Powerful Moderator
Staff member
"The average price of $1,996 was up from 2020, according to Avison Young, but down nearly 50% from $3,485 in the peak of 2016."

"A recent valuation of one Fifth Avenue retail property, for example, pegged its worth at just $37.8M — a 70% drop from six years ago. Last October, three retail properties on Madison Avenue sold for $1,340 per SF, a reported 80% drop from 2014."

""We sold it at over $2K a foot … Back in the day, we sold properties on Bleecker Street for north of $6K or $7K a foot,” he said. “We're talking about retail values, in some cases, that are less than half what the peak was.”
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
"The average price of $1,996 was up from 2020, according to Avison Young, but down nearly 50% from $3,485 in the peak of 2016."

"A recent valuation of one Fifth Avenue retail property, for example, pegged its worth at just $37.8M — a 70% drop from six years ago. Last October, three retail properties on Madison Avenue sold for $1,340 per SF, a reported 80% drop from 2014."

""We sold it at over $2K a foot … Back in the day, we sold properties on Bleecker Street for north of $6K or $7K a foot,” he said. “We're talking about retail values, in some cases, that are less than half what the peak was.”
wow, contrarian in me wants to buy it all
 
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