How Did SL Green & Jeff Sutton Land a Juicy New Leasing Property?

New York-based REIT SL Green Realty Corp. and partner Jeff Sutton officially announced today that they have entered into an agreement to buy out the lease of retailer Juicy Couture at 650 Fifth Avenue.

The New York Post broke the story yesterday, reporting that the partners will pay the retailer $50 million.

It's still a sweet deal.  In their press release, the partners note that the deal allows them to combine Juicy's basement, street and second-floor retail space with third-floor, which will make the new tenants bigger and their rents higher.

The spot on the southwest corner of 52nd Street is considered one of the prime spots on one of the world's top retail avenues.

The SL Green/Sutton joint venture recently acquired a 49-year leasehold interest covering the entire retail portion of the property after a judge ordered the sale.  The building has been the subject of unusual litigation for years, with the federal government charging that it is illegally owned by Iranian entities in violation of laws that sanction the Iranian government.

No word yet on what the asking price of the new expanded space will be be, but the court decision, the Post story noted, said that by not executing a master lease for the retail part of 650 Fifth, the building was losing $30,000 a day in rental income.

SL Green President Andrew Mathias's press release statement:

By executing this transaction, we are immediately creating substantial value for the leasehold and fee interest at the property. Our conversion will enable a retailer to establish a vertical store in a prime Fifth Avenue location with nearly 30,000 square feet of space.

 

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