Things aren’t looking good for Barneys after a New York arbitrator’s ruling means the company’s flagship store could soon be facing twice the rent it currently pays, according to The New York Post.
Ashkenazy Acquisition Corp. is now free to make $30 million off of a rent increase thanks to the ruling from last week, according to The New York Post exclusive.
It wouldn’t make sense for Barneys to relocate somewhere that’s also large because of its lease ending in under six months.
“While we are disappointed in the decision,” Barneys said in a statement that went on to say “our customers remain our top priority and we are committed to providing them excellent services, products and experiences at our Madison Avenue location.”
Ashkenazy could take advantage of the space that would be free, or at least take over some of that space. A source speaking with The New York Post added that it would make sense because of how the design of the two buildings suits his needs well. Another source said that the desire to take over that space doesn’t have any truth to it.
The Barneys in Beverly Hills, Calif., has ownership by Ashkenazy and is in a position where he wants to keep a good relationship with the landlord.
“I hope they find a way to reconfigure the space so that Barneys can stay on Madison Ave.,” Joanne Podell, a vice chairman at Cushman & Wakefield said. “They are an important retailer and anchor on Madison Ave.”
Ashkenazy’s principals didn’t comment when the New York Post tried reaching them.
The Jewish Voice has written extensively on this issue in the past.
Now, however, Barney’s future in its flagship Manhattan location at 660 Madison Avenue, (surrounded by the finest names in haute couture) is in question. Back in December, it was reported that the retail giant was at loggerheads with its landlord over a possible rent increase. As such, Barney’s fate would be determined by an arbitrator, whose services have been solicited in attempts to resolving the monetary issues between the two sides.
Barney’s current lease is set to expire in 2019 and the property’s owner, Ashkenazy Acquisition is asking for an increase in rent. For months now, the two sides have been immersed in intense negotiations as they grapple to see resolution of precisely what constitutes fair market rent at the property. At present, Barneys pays $20 million per year to rent the nine-story building at Madison Avenue and East 61st Street.
His biography says that Ashkenazy Acquisition is a New York-based firm that invests in retail and office real estate and asserts that it has a portfolio of over 100 buildings. Ashkenazy is the chief executive, chairman, and founder of the company. Along with his company’s 660 Madison property, he also has other retail condominiums in shopping districts all within Manhattan. Ben’s father, Izzy Ashkenazy, is a businessman also involved in real estate.
By: Karen Gould