Vornado Sells Manhattan Retail Space for $350M

Vornado Realty Trust has announced that its 52 percent-owned street retail joint venture has agreed to sell a portion of Uniqlo’s U.S. flagship store at 666 Fifth Ave., in Midtown Manhattan, for $350 million.

The Japanese clothing company will buy 17,295 square feet of its 90,732-square-foot store, while Vornado’s joint venture will continue to own the 23,832 square feet occupied by Abercrombie & Fitch and Tissot stores at the location.

Eastdil Secured provided advisory services to Vornado’s street retail joint venture. The sale is expected to close by the first quarter of 2025, pending customary closing conditions and Uniqlo’s separate transaction with the office condominium owner.

The expected $340 million in net proceeds from the sale will be utilized to partially pay down Vornado’s $390 million preferred equity stake in the asset. When the transaction is finalized, the pass-through leases between the office condominium owner and the retail joint venture will come to an end.

Last year, Vornado Realty Trust entered into an agreement to sell four downtown Manhattan retail buildings, encompassing 123,000 square feet. The company also sold a fifth retail asset in a separate deal, with the total sales price for both transactions amounting to $124.4 million.

Manhattan’s retail scene

The Manhattan retail market remained resilient in the second quarter of the year due to steady new leasing activity and tenant expansion requirements. The retail availability rate held steady at the previous quarter’s 14.1 percent, the lowest rate in nine years, according to a recent Cushman & Wakefield report.

Availability along Lower Fifth Avenue, between 42nd and 49th streets, dropped to 14.8 percent, the lowest rate since 2012. The largest lease in the area was for GU, Uniqlo’s sister brand, securing 24,330 square feet at 510 Fifth Avenue, the same source shows.