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A mixed-use building with a stable retail tenant right on Fifth Avenue has been put up for sale.
The London-based Mactaggart Family & Partners, also known as Western Heritable, is offering to sell the leasehold on 589 Fifth Ave., a 17-story building with the first five floors occupied by the largest H&M store in the world, Real Estate Alert reports.
H&M's 68K SF lease at the 184K SF building runs until 2033, giving the building uncommon stability in a corridor that has seen rents decline precipitously from their 2014 peak. Sitting at the corner of Fifth Avenue and 48th Street, the property is near the northern edge of the Grand Central retail corridor that, according to CBRE, averaged asking rents of $1,048/SF in the fourth quarter.
That was a 10% drop from the end of 2016, although that corridor — Fifth Avenue between 42nd and 49th streets — did see a 2.5% gain in asking rents between the third and fourth quarters, according to CBRE. Whichever way the market heads, H&M is locked in potentially through another cycle or two.
The sixth through 17th floors of the building are dedicated to office space, which is 60% leased in a submarket that averages $105.33/SF in asking rents, according to Cushman & Wakefield, which is marketing the property. The office portion has floor plates ranging between 5K and 15K SF, with six terraces dotting the building.
Mactaggart is seeking up to $400M for the leasehold, according to REA, and wishes to include a 99-year ground lease as part of any deal. The family company purchased the building in 1998.
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