Prada Buys Fifth Avenue Flagship For $425M
Prada is closing out the holiday shopping season with a bang.
The Italian fashion house purchased its Manhattan flagship at 724 Fifth Ave. for $425M, it announced this week. At $6,205 per SF, the deal for the 68K SF property is the priciest sale of a Fifth Avenue building since the pandemic began.
Prada has leased space in the 12-story building since 1997, most recently from Wharton Properties founder Jeff Sutton, who acquired 724 Fifth Ave., along with SL Green and Stonehenge Partners, in 2012 for $223M, The Real Deal reported. Sutton bought out his partners in 2018.
Prada is the second international retailer in as many weeks to buy a full building on Fifth Avenue. Last week, Japanese coffee company Geshary paid $38M for the five-story building at 560 Fifth Ave.
"The Property’s location offers high strategic value being characterised by increasing scarcity and long-term potential; furthermore, the area in the immediate vicinity of the Property has recently seen an influx of significant investments that have further improved the residential, hospitality and retail appeal," Prada wrote in a regulatory filing.
The deals underscore Fifth Avenue's comeback since 2020, when luxury brand Valentino sued its landlord, claiming it should be let out of its lease because it was predicated on the "luxury, prestigious, high-quality reputation of the immediate Fifth Avenue neighborhood," which was lost amid the depths of the pandemic.
Across the street from Prada's building, Louis Vuitton is reportedly interviewing designers to redevelop its flagship at 727 Fifth Ave.
Rents have fallen in the district since their pre-pandemic highs, but they are still the highest of any retail corridor in the world at $2,000 per SF, according to Cushman & Wakefield.
Luxury retailers are fueling renewed optimism for storefronts across Manhattan, Bisnow reported last week.
Prada paid in cash for the building, it said in the filing with the Stock Exchange of Hong Kong, where its shares are listed. It plans to use the floors above the five-story flagship retail space for offices and storage.
Sutton's profitable exit from 724 Fifth Ave. stands in contrast to his investment down the street. He has been fending off foreclosure at 717 Fifth Ave., where he has Dolce & Gabbana and Armani as tenants.
