A German real estate investment group is expected to lose tens of millions of dollars on retail space it acquired on 42nd Street (off Times Square), just five years ago.
Located at the base of the Hilton Garden Hotel, GLL Real Estate Partners purchased the 17,000 square foot retail space for roughly $85 million. In previous years, Times Square was one of the City’s hottest retail locations, but Richard Hodos, the vice chairman of CBRE Real Estate recently told Crain’s New York that the industry has transitioned away from typical storefronts.
“Most of the national chains, whether it’s American Eagle, or Gap, or Victoria’s Secret are looking to close stores and rationalize their fleet of spaces right now,” he says. “We look at the retail data and you see declines in the number of shoppers going into stores literally almost every week.”
GLL Real Estate has hired a sales team to attempt to sell what was once coveted space, which includes “basement, ground, second and third floors, for roughly $50 million,” a stunning $35 million loss.
“With retail and multi-unit residential housing both on the decline, this can’t bode well for New York City,” noted Robert C. Epstein, of counsel to Newman Ferrara LLP. “Our local leaders need to act quickly to address and correct this unfavorable investor environment,” he continued. “Otherwise tax revenue will drop precipitously and that will adversely impact public education and other services.”
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