A New Chapter for Fifth Avenue: The Rise of a Thriving Office Tower
Nestled within the vibrant shopping district of Fifth Avenue in New York City lies an unexpected sight: a vacant lot. However, this space is poised for transformation. The development site at 570 Fifth Avenue, located between 46th and 47th Streets, is set to welcome a striking 33-story office tower, featuring an expansive 80,000-square-foot IKEA store at its foundation, as announced by the developer, Extell Development.
In a significant move, Ingka Investments, the real estate arm of Ingka Holding—recognized as the world’s largest franchisee of IKEA—has infused approximately $400 million into the overall project, according to Gary Barnett, the founder and chairman of Extell. In return for this substantial investment, Ingka has acquired a one-third stake in the building and the rights to its retail space.
“Having Ingka as a partner has proven to be immensely beneficial for us,” remarked Mr. Barnett. “Their investment has not only provided a considerable amount of equity but has also established them as our collaborative partner in the overall office venture, in addition to acquiring their retail space.”
This strategic investment from Ingka has enabled Extell to proceed with the long-anticipated office building project, a vision that was initiated over a decade ago when the developer first began acquiring parcels for this prime development site. Furthermore, this partnership allows Ingka to secure a highly desirable location on Fifth Avenue while ensuring that its popular furniture remains accessible to customers.
“Our goal is to ensure long-term stability for IKEA, allowing us to maintain predictable overhead costs and uphold our commitment to providing affordable products to our customers,” stated Jenna Grader, a portfolio manager at Ingka Investments.
