Under Armour spikes plan for Fifth Avenue flagship

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Under Armour is asking $20 million a year for the 24,403 s/f
left of its once-heralded flagship store at the GM Building in New York City.

The beleaguered sports retailer has handed back the other
half of the 53,000 s/f it had originally planned to turn into “the single
greatest retail store in the world” to landlord Boston Properties, which is
converting it into a tenant amenity center.

“It’s a premier space offering 14,000 s/f on the ground floor
and 10,000 s/f upstairs and the ask is $20 million,” said David Green, vice chairman
and co-leader of Colliers International’s New York Retail group, who, along
with Steven Soutendijk at Cushman & Wakefield, has been retained by Under Armour
to sublease the 24,403 s/f.

“It’s next to the Apple store, has 38 ft. ceilings, almost entirely column-free,” added Green. “It clearly has the most visible branding potential of any space on Fifth Avenue that’s available. It’s a very, very, very good space from our perspective.”

The 767 Fifth store sits next to the famous Apple cube at the GM Building.

When Under Armour first signed the reported $30 million a
year deal for the original 53,000 s/f in 2016, it was considered a coup for the
company as it jostled for market dominance with rival, Nike, and sought to
boost its brand identity with a showpiece store in one of the world’s top
luxury markets.

It beat out competition for the iconic space at the base of
the GM Building at 767 Fifth Avenue that had been home to FAO Schwartz for three
decades before it closed in 2015, and founder Kevin Plank promised to turn it
into “the single greatest retail store in the world” when it opened in 2019.

However, the opening was continually pushed back as the sports
gear unicorn saw its sales growth stumble after 26 straight quarters of growth.
Plank stepped down as CEO 2019 just before the COVID pandemic plundered its
share value further.

The first hints it would forego the opening of the flagship Fifth
Avenue store came last fall, when chief financial officer Dave Bergman said the
company was facing weak demand and a drop in revenue that may force it to focus
on smaller, more profitable shops and online sales.

“The Fifth Avenue location is a premier retail location, but we’re considering whether it may be better suited for someone else at this time,” said Bergman.

Boston Properties took back half the space to turn it into a tenant amenity center.

Colliers’ David Green said Boston properties had since taken
back 25,000 s/f for its tenant amenity space and that he and Soutendijk are now
on the hunt for that “someone else.”

He said he already has some major players poking around. “International brands that want to be on that stretch of Fifth Avenue and are looking for recognition have come to the States and view it almost as a beacon. It’s fantastic as a visual advertising vehicle. You have all of the up-and-coming cool brands that want to make a statement that are known around the world, luxury fashion that has traditionally been on Fifth Avenue… We have a number of those players. That’s the scope. It’s the best of the best that are looking.”

DAVID GREEN

A retail leasing veteran who previously worked with
Soutendijk at Cushman & Wakefield overseeing Boston Properties retail
portfolio, Green said that while the city had been “hit hard” as a result of
the pandemic, “luxury brands are recovering well and we are seeing much more
interest and activity.”

He added, “I think New York has been through the toughest
part in terms of retail leasing and we are now looking forward to much more
activity. In the last three-to-four weeks, the number of groups who are asking
to see the space and submitting proposals has increased dramatically.

“I’m very bullish on the near to long-term future for New York. It has always had an allure that other places don’t have and I am confident that, based on what we are seeing right now, that will come to fruition.”

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