The land below the Beverly Hills flagship store of luxury retailer Neiman Marcus has been sold to a New York investor as the owners of the department store chain sell property to pay debts.
Neiman Marcus, which has occupied the 9700 Wilshire Boulevard store since it opened in 1979, will continue to serve customers there as a tenant.
“We made the strategic decision to sell the land beneath the Neiman Marcus Beverly Hills store and enter into a long-term lease with the new owner,” said a spokesperson for Saks Global. “This opportunistic real estate transaction does not impact our day-to-day operations. We remain committed to serving our loyal Beverly Hills customers.”
Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus, Saks Off 5th and Bergdorf Goodman, sold the Beverly Hills Neiman Marcus building for an undisclosed price.
The new owner of the marble-clad property on the edge of the city’s prestigious Golden Triangle is Ashkenazy Acquisition Corp., a private real estate investment firm owned by Ben Ashkenazy.
Ashkenazy also owns the former Barneys building on Wilshire Boulevard that is now occupied by Saks Fifth Avenue.
“This strategic acquisition significantly expands Ashkenazy’s presence in Beverly Hills and reinforces the firm’s focus on irreplaceable, best-in-class retail assets located in globally recognized luxury corridors,” the company said in a statement.
Executives at Saks Global have signaled plans to shore up cash by offloading stores, or raising emergency financing.
It could also part with a stake in luxury retail chain Bergdorf Goodman to help pay off debts and reinvest in its core retail business, real estate data provider CoStar said.
The company faces a $100-million debt payment deadline at the end of December and is considering Chapter 11 bankruptcy as a last resort, Bloomberg said. The scramble comes a year after Saks Global purchased Neiman Marcus in a $2.7-billion deal.
The Beverly Hills retail property market is still one of the most robust in the country, said real estate broker Jay Luchs of Newmark. He was not involved in the Neiman Marcus property sale, but has brokered sales and leases of luxury stores in Southern California for more than two decades.
“This is probably the best it’s ever been in Beverly Hills,” he said, with “essentially nothing available” on Rodeo Drive for merchants in search of store space and demand climbing on nearby streets such as Wilshire Boulevard.
Some top-shelf brands are making their stores larger, and luxury brands, including LVMH, Chanel, Hermes and Richemont, are buying their stores instead of renting them, he said.
“They don’t do that unless they’re making a tremendous amount of money, unless they want to be there forever,” Luchs said, “and they realize that Los Angeles and Beverly Hills is a very important market for them.”
