Sutton values on Madison, 34th Street cut by over $100M, others rise: TASE filing
By Adam Pincus
The valuations for two of Jeff Sutton’s retail properties were reduced by more than $100 million last year, but the bulk of the 20 properties in the portfolio tied to bonds on the Tel Aviv Stock Exchange did not materially decline in value, according to an annual report Wharton Properties filed last week. At least one property significantly rose in value.
Sutton’s 747 Madison Avenue declined the most in value, falling by about $75 million, due to the renegotiation of the Givenchy lease at the property. It now has a value of $165 million, down from $240 million at the end of 2019. The second-largest decline was at 29 West 34th Street, which fell in value by $28.5 million, to about $90 million. The properties were negatively impacted by the Covid pandemic, according to the annual filing, here in Hebrew.
Despite the decline in value, Givenchy and its parent company LVMH did agree last year to pay a $24.5 million early termination fee which allows the tenant to exit as early as 2022, as the Commercial Observer reported at the time.
Other properties in the portfolio are on Fulton Street in Downtown Brooklyn and elsewhere. One property rose in value significantly. In March 2021, Sutton sold a 95 percent stake in 166 Berry Street in Williamsburg. The property was acquired in November 2019 for $20 million. Last year, Sutton executed a lease with Bank of America with an initial term of 20 years and five extension options for five years each. That property is now valued at $31.3 million as of the end of 2020, and for the sale in March 2021.
The report indicated rent collection was generally strong, despite Covid, putting it at 90.5 percent. The report said the company was negotiating or engaging with tenants, with one example being Aldo which reached out to Sutton and its rent was negotiated to be 20 percent of its gross revenue through the end of 2021.
Sutton, president and founder of Wharton Properties, owns more than 100 properties in New York City, the vast majority of those are retail and concentrated in high-traffic shopping districts.
In 2017 he packaged a collection of the retail properties and sold bonds worth $233 million secured by them through the Tel Aviv Stock Exchange, as The Real Deal reported. At the time there were 18 buildings in the portfolio, but he has since then bought and sold assets.