Donald Trump’s private real estate empire officially lost one of its most important tenants on Monday, when Nike announced that it is closing its store at the president’s 6 East 57th Street property in New York City next spring in favor of a new location just a few blocks away. The announcement comes a year after commercial landlord SL Green disclosed that it had signed a 15-year lease with Nike at 650 Fifth Avenue.
Of all of the commercial properties in President Trump’s portfolio, the site known as Niketown is by far the largest occupied by a single tenant. With Nike leaving, the Trump Organization is left searching for a new identity at the marquee property, which Forbes estimates is worth $253 million.
The building comprises 65,000 square feet of space just off of Fifth Avenue, in the middle of one of the most famous retail corridors in the world. But as Amazon and other e-commerce sites grab more business every year, the value of retail real estate in the neighborhood continues to fall. That Trump controls Niketown, which is just around the corner from Trump Tower, only further complicates things.
“I don’t know of any tenants that need that much space other than department stores,” said Eric Anton, a Manhattan real estate broker at the firm Marcus & Millichap. “And I don’t think there are any expanding department stores. Maybe Harrods comes in and takes it. But any foreign group is going to be looked at as weird–you know, collusion or some kind of crazy Trump conspiracy theory.”
Domestic retailers might also look for other sites in a New York City borough where only 10% of the population voted for Donald Trump. Tiffany’s, which owns the site next door to Niketown, said “post-election traffic disruptions” helped cause a 14% drop in sales during the 2016 holiday season.
Still, 6 East 57th Street remains in the heart of New York’s commercial district, which draws tourists from all over the world. “You’ve got the best retail on the planet within 100 feet in every direction,” Anton said. “Maybe you cherry-pick one of the tenants that’s coming out, you know. You’re definitely going to do a new facade. They’ll scrape that facade off and they’ll build something really interesting.”
More Info: www.forbes.com
Categories: Money Matters