Uptown Madison Avenue, the city’s premier luxury shopping street, is undergoing profound changes in the golden blocks where East Midtown meets the Upper East Side.
Two major office and retail buildings are being demolished to make way for new mixed-use projects about which little is known. Meanwhile, wealthy fashionistas and even wealthier real estate investors are wondering what will become of the former Barneys building, which has been vacant for four years.
We first reported in July that Related Cos. will demolish 625 Madison between East 58th and 59th streets to build a mixed-use supertall tower that could rise more than 1,200 feet. Related’s Jeff Blau told us that demolition of the building and an adjacent building for a skyscraper with luxury condos, shops and perhaps a hotel will take nine months. The entire site is currently covered in scaffolding.
Now comes news via Crain’s that demolition plans have also been filed for the 24-story 655 Madison building between East 60th and 61st Streets. The owners, a joint venture that includes Jamestown and Williams Equity, are planning “a mix of retail, restaurants and residential,” Williams co-managing director Michael T. Cohen previously told Commercial Observer.
Retail tenants have moved out of 625 Madison – most notably Marc Jacobs, which had the large south corner. Despite a sign promising the designer is moving to a new location on Fifth Avenue, no lease has been announced for Fifth. (As we reported, negotiations for 645 Fifth came to nothing.)
Adding to the uncertainty about the future, the elegant but vacant 10-story former Barneys building at 660 Madison — across the street from 655 Madison — continues to puzzle real estate market insiders and, according to Real Deal, frustrates investors of principal owner Ben Ashkenazy.
Ashkenazy told Real Deal: “I decided to leave the building vacant for a reason, because a major retailer is going to buy it” – for a billion dollars.
Although a large Valentino boutique recently moved into the former Calvin Klein space next door at 654 Madison, most of the block between East 60th and 61st Streets appears desolate.
Matthew Bauer, president of the Madison Avenue Business Improvement District, expressed an optimistic long-term outlook.
“What sets Madison Avenue apart from other luxury shopping destinations around the world is that the majority of its customers are local,” Bauer said.
“These new buildings will not only bring new shopping and dining options to the neighborhood, but also residents who will become customers of our shops, restaurants, spas, salons and galleries.”
He noted that both the new 625 and 655 Madison buildings “will likely now have a large residential component” and “will follow recent precedents for new construction in Madison, with upscale retail on the lower floors and luxury residential on the upper floors.”
He mentioned 760 Madison, the nearly completed Giorgio Armani Residences and current projects by the Naftali Group further north at 1045 and 1165 Madison.
A retail broker who wished to remain anonymous saw a positive side of a completely different kind.
“When stores close because of new developments, it’s always good business for other landlords – and for us. Stores have to find somewhere else to go, and right now there are plenty of places they can go.”
