Gucci’s owner is paying nearly $1 billion for a tower on red-hued Fifth Avenue

Gucci’s owner is paying nearly $1 billion for a tower on red-hued Fifth Avenue

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Gucci’s owners on Monday bought a prime retail property on Fifth Avenue for $963 million, and that could mean ousting rival fashion house Armani from its prime location.

Kering, Gucci’s parent company, has acquired a 115,000-square-foot, three-story retail space at 715-717 Fifth Avenue, at East 56th Street, which is located at the base of a 28-story office tower known as the Corning Glass Building.

Newer condo retail sale is critical on several levels.

It marks vendor Geoff Sutton’s third stunning coup on the legendary shopping street in less than a month. Prominent retail developer/landlord Wharton Properties has sold both 720 Fifth Ave. and 724 Fifth Ave. to Prada for a total of $835 million last month — which was the city’s largest combined investment sale transaction in 2023.

Gucci’s owner said the purchase of the Corning Glass building “represents another step in Kering’s selective real estate strategy aimed at securing highly desirable prime locations for its homes.”

It also reflects the soaring fortunes of “the world’s greatest shopping street,” as Kering’s purchase accelerated a trend of major retailers buying up downtown Fifth Avenue property for their own use — following Prada, LVMH, Rolex, and Harry Winston, among others. .

Gucci purchased the retail property for $963 million.

“Note that most of the buyers are foreign companies,” said Joan Bodell, a retail broker at Cushman & Wakefield. “Maybe because in Europe they buy long-term interests in retail properties. They don’t have to deal with lease expiry dates. Of course, there is innate value in buying on the most important retail street in the world.

It’s not clear how the sale will affect the building’s current tenant, the Armani boutique and restaurant at 717 Fifth — or the current Gucci flagship store in Trump Tower across the street.

Another fashion competitor, Dolce & Gabbana, also has a major store on site. Kering’s lines, in addition to Gucci, include Saint Laurent, Balenciaga and Alexander McQueen.

Armani at 717 Fifth Avenue. The purchase accelerates a trend of major retailers purchasing properties on Midtown Fifth Avenue for their own use Elizabeth Lipman

Armani’s lease at 717 Fifth, which was signed in 2007, will reportedly expire in a few months. The iconic fashion house will soon open a new store and restaurant at 760 Madison Ave., where it has partnered with SL Green on a Giorgio Armani-branded residential tower.

SL Green was a junior minority partner in the Fifth Avenue retail properties. “This disposition represents another successful investment in our partnership with Jeff Sutton,” said Harrison Sitomer, Chief Investment Officer at SLG. “This transaction is another example of how well-located assets continue to generate demand for global investors across cycles.”

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