Deals

RREEF invests $290m in NYC retail condo

The real estate investment business of Deutsche Bank Asset Management has made an investment in 717 Fifth Avenue on behalf of a German institutional investor.

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RREEF Real Estate has made an investment in a New York City retail condominium valued at $618 million. According to a statement, the real estate investment business of Deutsche Bank Asset Management has invested $290 million in the property, which is located at 717 Fifth Avenue, on behalf of a German institutional investor. A spokeswoman for Deutsche Bank declined to disclose the investor. 

717 Fifth Avenue, a 468,000-square-foot property configured with both retail and office space, was constructed in 1959, renovated in 1993 and expanded in 2001. The three primary tenants include the US flagships stores for luxury retailers Giorgio Armani, Dolce & Gabbana and Escada. RREEF's investment includes the entire retail component of the property and a portion of the office space.

“We believe strong employment growth and domestic and international tourism will continue to bolster the strength of the property and the New York retail market overall,” said Todd Henderson, head of RREEF Real Estate Americas. “Cross-border capital raising and investment remains a key component of RREEF's strategy, and we are pleased to bring this high-quality investment opportunity in New York to our Germany-based client.”

Last week, prior owners SL Green Realty and Jeff Sutton restructured and recapitalised their joint venture ownership of the asset. On 25 July, SL Green announced that it had sold 50 percent of its interest to Sutton and retained an 11 percent stake in the venture's retail condominium property at a price that values the asset at $618 million.

In addition, the SL Green and Sutton venture received $590 million in new financing, split between a $300 million fixed-rate mortgage and a $290 million mezzanine loan. The mortgage was originated by New York Life and TIAA-CREF and has a 10-year term, while the mezzanine loan was provided by RREEF and has a 12-year term. 

RREEF’s investment in 717 Fifth Avenue follows its 2011 purchases of two retail properties in Manhattan's Meatpacking and SoHo neighbourhoods on behalf of investors. In April 2011, RREEF acquired 473-475 Broadway, a retail condo fully leased to retailer ScoopNYC. In July 2011, it acquired 415 West 13th Street, a retail condo leased to UK-based retailer AllSaints Spitalfields.