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In a piece of good news for Manhattan's challenged retail sector, one of the most recognizable stores in the city has traded hands.
Paramount Group and a partner are paying $190M for the 25K SF retail space in Times Square where M&M World is located, The Wall Street Journal reports.
The deal comes two years after owner Sherwood Equities listed the property for sale, having purchased what was then an office building in 1987. The confectioner’s lease on the space runs until 2036, the WSJ reports.
The tower with the M&M World space on the ground floor and condominiums above it was built in 2004. The sale will come as welcome news for both the city’s investment sales market and retail climate, both of which have been strained during the course of the coronavirus pandemic.
Major retail strips like Times Square have been hit hard by vacancies and slipping rents. With a dearth of international tourists, Times Square saw foot traffic plunge, and even with stores and Broadway now reopened, that traffic is still 20% below 2019 levels, the Times Square Alliance told the WSJ.
The sale will also boost the city’s investment sales market, which has been sluggish through 2020 and 2021, with few major sales pushing up volume. The year was on pace to see just $8.6B in sales, compared to a 10-year average of $36.2B, according to Avison Young.
In the third quarter, there were $2.3B worth of commercial real estate trades across the city between July and September, according to Avison Young data, marking a 3% jump on the trailing four-quarter average.
Some owners have considered it worthwhile to offload retail assets, even at a loss. In August, Vornado announced it would get rid of five poorly performing properties in prime New York City retail strips, electing to take a multimillion-dollar loss as result.
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