Commercial Real Estate & Advisory
Commercial Real Estate & Advisory
Duane Reade has signed a deal for roughly 12,000 square feet at 60 Spring Street according to sources.
The space is being vacated by Parasuco Jeans, which acquired the retail condominium in the building for about $9 million in 2005 from the developer Shaya Boymelgreen, who had bought and converted the 12-story building into residential condos.
The store was the first and only location in the U.S. for the Canadian clothing company, known primarily for its jeans. A person who answered the phone at the store and identified herself as the district manager confirmed that Parasuco would be closing and that Duane Reade will be taking the space.
Salvatore Parasuco, the company’s chief executive, will continue to own the space, according to a source, and collect the nearly $1 million in annual rent that Duane Reade was said to have agreed to pay in the deal.
One person familiar with Duane Reade’s lease at 60 Spring Street said the deal was conceived by company executives almost a year ago to be emblematic of the new image they have been trying to model for the pharmacy chain.
Although Duane Reade’s saturation of the city streetscape through years of aggressive leasing have made it the most convenient option among pharmacy chains for many New Yorkers, its stores suffered from a reputation for being cramped and dingy. In recent years, the company had appeared close to collapse under what some analysts had predicted would be a lethal debt load. But Duane Reade mounted what appears to be a turnaround, freshening up its stores and in February arranging a deal to be sold to rival Walgreens for $1.1 billion in an acquisition that appeared to bolster its tenuous financial position.
The source said that the space at 60 Spring embodies the kind of attributes the company wants its stores to now exude. Formerly the headquarters of the East River Savings Bank, the lower section of the building that houses the retail space features an eye-catching three-story colonnade and limestone façade.
“It looks like Grand Central Terminal inside,” the source said, describing the interior of the space as having nearly 30-foot ceilings, gilded moldings and a marble staircase leading to the basement of the dual level space. Duane Reade executives had been “relentless” in pursuing the deal the person said and considered the location, even though it will be slightly smaller than a typical Duane Reade branch, to be perfect for a flagship Manhattan store.
“They’re absolutely committed to shedding their old frumpy image and showing that they’re the sexiest, hippest, greatest drug store around,” the source said. “Yet they’ve always called themselves New York’s drug store and this space is so iconically New York and classic downtown.” Jeff Winick, the chief executive of Winick Realty Group, a brokerage that specializes in retail leasing, represented Duane Reade in the deal. Winick declined to comment for this article.
MICHAEL GLANZBERG, a principal at Sinvin Realty LLC, a brokerage that specializes in retail deals primarily in Soho and other areas in midtown south and Lower Manhattan, marketed the space for Parasuco. Reached in his office, Glanzberg confirmed that he was Parasuco’s representative along with CHRIS JOHNSON, a director at Sinvin.
The district manager at Parasuco, who gave her name as Christine, said that the lease was prompted by Duane Reade’s strong financial offer for the space, suggesting that profit and not anemic sales had motivated the deal.