Ikea Makes SoHo Buy For $213M
Ikea is expanding further in New York City, just months after committing to its first full-size store in Manhattan.
A deed filed Tuesday shows that retail real estate king Jeff Sutton sold 529 Broadway for $213M.
The property record doesn't explicitly name the Swedish company, but it includes the address for Ikea’s North American headquarters in Conshohocken, Pennsylvania, and is signed by the company’s associate general counsel, according to LinkedIn.
Ingka Investments, the investing arm of Ikea's parent company, confirmed the purchase in a press release Wednesday. The retailer plans to open a 25K SF store at the property, occupying the bottom two floors. The upper four floors of the 53K SF building will be converted to office.
"This marks Ingka Investments' fourth acquisition of prime commercial real estate to support IKEA's growth in the world's leading cities," the statement says. "Through property ownership, we can secure IKEA presence at the most important retail hubs while keeping affordability at the core."
Sutton’s Wharton Properties, alongside A&H Acquisitions, Bobby Cayre’s Aurora Capital Associates and Joseph Sitt’s Thor Equities, originally bought the SoHo building for roughly $147M in late 2012. The joint venture financed the acquisition with a $100M loan from Deutsche Bank, and in 2016 it secured a $195.3M refinancing loan from UBS and Morgan Stanley.
In 2022, Commercial Observer reported that Sutton and his partners attempted to sell the debt tied to the property, which is set to mature in September 2026. However, property records don't show that the effort was successful.
Sutton didn't immediately respond to Bisnow’s requests for comment.
Eastdil Secured advised Sutton on this transaction.
The building is home to a Nike store that had more than 10 years left on its lease as of the 2022 CO report.
In July, it was revealed that Ikea would anchor the base of Extell Development’s 570 Fifth Ave. project with an 80K SF store. As part of the deal, the company agreed to invest $292M in the tower's construction, according to Tel Aviv Stock Exchange filings first reported by Bisnow.
But that store is far from opening, as Extell only recently finished putting together the assemblage needed for the 33-story, 1.1M SF tower. Earlier this month, the project landed an anchor tenant for the office space above. Construction is expected to cost more than $1B.
Sutton has been prolific when it comes to making deals directly with retailers. In a matter of months in late 2023 and early 2024, he sold four properties to tenants for a grand total of nearly $2B. Kering, the parent company of Gucci, Balenciaga and Brioni, paid Sutton $963M for the 115K SF retail condominium at 717 Fifth Ave.
UPDATE, OCT. 1, 1:50 P.M. ET: This story has been updated to include a comment from Ingka Investments, the investing arm of Ikea's parent company.
