Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is arranging the sale of 862 Broadway, a mixed-use retail and residential asset fronting New York’s Union Square. The retail component, including ground-, lower level- and second-floor space, is fully leased to AmorePacific, a $14.1 billion South Korean cosmetics conglomerate, and is operated by its Innisfree brand as its U.S. flagship. 862 Broadway is a quintessential flagship directly visible from Union Square with a location along one of New York City’s most charming blocks. This offering represents an exceptional opportunity to own generational real estate in New York City’s thriving Union Square.
Innisfree, which was launched in 2000, became the best-selling cosmetics brand in Korea by 2015 and the seventh largest cosmetics company in the world. Its parent company, AmorePacific, is a multi-brand conglomerate that is widely considered to be the “Estée Lauder of Korea.” Innisfree has nearly 1,600 stores in Asia and is projected to be the second most successful brand for the company and set to record 1 trillion Won in annual sales ($865 million USD). AmorePacific recently signed a 10-year lease at the property with annual increases and a FMV option.
Prior to occupancy, Innisfree spent approximately $1 million to outfit the space with physical and cosmetic upgrades. The top two floors are full-floor, loft, market-rate apartments that offer near-term upside through adding bedrooms to increase rents. Further, with more than 11,000 square feet of additional air rights, the property provides an attractive long-term redevelopment opportunity.
Properties on Union Square Park rarely become available, and this offering is a unique opportunity to invest in a retail destination that has experienced record levels of pedestrians. Union Square is one of the most popular neighborhoods in Manhattan and will continue to flourish given the continued momentum of the Midtown South Office market as well as significant recent capital investments, including the $250 million redevelopment of 888 Broadway (former ABC Carpet & Home headquarters), the redevelopment of Tammany Hall, the 250,000-square-foot 14th Street Tech Hub and numerous others. This dominant stretch of Broadway has become desirable for a variety of retailers. Lower Fifth has emerged as an increasingly strong shopping destination and top performer, bringing additional foot traffic to the Union Square submarket. Over the past three years, these retail corridors have experienced average rent growth of 9.3 percent.
For more information on this commercial property for sale or other available mixed-use properties in New York City or the surrounding areas, please contact Rob Rizzi, Jeff Julien, Andrew Scandalios, Steven Rutman or David Fowler in HFF’s New York office. Click here for our real estate investment sales search page.