The Trump Organization may soon have to deal with a shuttered Niketown — but the bucks will keep flowing at the 6 E. 57th St. location adjacent to Trump Tower.
Nike will close there in March and expects to open its new store at 650 Fifth Ave. next November. But the athletic apparel giant picked up a five-year option in May 2017, and Trump will receive rent until at least mid-2022. Its 1995 lease even has two more five-year options that go through mid-2032. We should live so long.
Once Niketown’s high school-themed store closes — its outside has P.S. 6453 on the top of the arched brick-and-glass façade — the savvy retail condo operators at 650 Fifth, Jeff Sutton and SL Green Realty Corp., will assume the Trump lease.
They have until 2020 to cut a deal and pick up the next option or simply hand it back to the Trumps, who have a ground lease through 2079.
With a lease written in 1995, even the escalated Nike rent gives Sutton and SLG the wiggle room to cut a sublease deal that is advantageous for both a new retailer and themselves.
When the letter of intent was signed, the lease pegged the annual starting rent for 80,000 square feet at $10 million — $2 million more than the $8 million that was paid by Galeries Lafayette before the retailer fled back to France. At the time, 57th Street was becoming a theme-retail locale, before those all decamped to Times Square, leaving 57th with the luxe tenants.
Nike leased less, around 66,000 square feet, which was dropped to the current 35,770-square-foot space — as per CoStar Group — after its floors were carved out to create a light-filled atrium.
Already, sources tell me other retailers are reaching out to make proposals for the swanky location along Billionaires’ Row opposite LVMH and adjacent to Tiffany’s, Trump Tower and 590 Madison.
As is typical, any new sublease store would have to be approved by Don Jr. and Eric Trump, who are running the family company while dad is POTUS.
There is also the possibility that the Trumps come up with a replacement tenant at a rent that makes it worthwhile to buy Nike out of its remaining term.
Stay tuned.
ncG1vNJzZmimqaW8tMCNnKamZ2Jlfnh7kGtmampfp7K1rcilnKurXaeyoq%2FHoqWgZZ%2BqwW6yzqtkrKefo3q1u4ybnGabnKTAprCMpqCdrJ%2Bsu266yKScraeno3w%3D