Nike SoHo Flagship Sold to IKEA Retailer Ingka Group
Ingka Investments, the investment arm of Netherlands-based Ingka Group has acquired 529 Broadway for $213 million. The five and a half-story, 53,000-square-foot building is located on the corner of Spring Street in the heart of SoHo. Constructed in 2016 on the site of a former 2-story warehouse structure, the property currently serves as a flagship for footwear and apparel-brand Nike under a 15-year lease plus options secured in September 2015 at an initial annual base rent of approximately $16 million according to news reports at the time. Although it is unclear as to when Nike will vacate the building, new ownership plans to reposition the retail property into a mix of office and retail, the press release by Ingka announced that the IKEA store will occupy approximately 25,000 square feet on the ground and 2nd floors, with lower-level space used for storage and back-office facilities. The remaining upper four floors will be renovated for premium office use. In December 2018 IKEA had leased a 17,530-square-foot space at 999 Third Avenue in the Upper East Side for Swedish retailer’s new smaller footprint “Planning Studio” concept, establishing its first U.S. outpost. However, in December 2021 IKEA U.S. announced the planned January 2022 closure of the store, noting in its press release that they are “actively searching for a new Manhattan location for its smaller store format.” Decisions to purchase the 529 Broadway building were due in part to it being “one of very few newly constructed properties in SoHo, designed to complement its historic surroundings while offering modern retail and office spaces,” according to Ingka’s press release.
Sellers Wharton Properties, A&H Acquisitions, Aurora Capital Associates, and Thor Equities acquired the site in December 2012 for roughly $146.877 million, securing $100 million from Deutsche Bank to close on the transaction. By 2016, the debt encumbering the property increased to $195.285 million and was assigned to U.K-based insurer Rothesay Life. In January 2022, the partnership put the debt up for sale, news reports at the time indicating that the “performing loan matures in September 2026 and is being sold with a 3.42 percent fixed-rate coupon,” and that Nike had more than 10 years left on its lease. News of the acquisition comes just over one year following the announcement of Ingka Group’s investment in 570 Fifth Avenue. The planned approximately 1 million-square-foot office and retail development is being constructed by Extell Development with an anticipated delivery in 2028. “A new IKEA customer meeting point will be located in the building’s prime retail space of 80,000 square feet arranged over two cellar levels with a corner entrance on Fifth Avenue;” and as part of the deal, “Ingka Investments will hold a one-third stake in the project alongside preferred equity components and full ownership of the prime retail space where the IKEA customer meeting point will be located.”
Source: https://www.ingka.com/newsroom/new-ikea-store-to-open-in-manhattans-soho-neighborhood/