Mark Zuckerberg is back in business with Vornado Realty Trust. This time, however, he’s not leasing office space from Steven Roth.
Meta signed a 10-year, 15,000-square-foot deal to lease the entire five-story townhouse at 697 Fifth Avenue in Midtown Manhattan, according to the Commercial Observer. The space will be used to sell virtual reality headsets and smart glasses, which are manufactured in conjunction with Ray-Ban.
Meta’s already spent time testing the store concept with a 5,000-square-foot pop-up that launched in the same space in November. Now, the company is making it official with its first permanent brick-and-mortar store on the East Coast; there are also Meta Lab locations in California, Las Vegas and Hawaii.
The lease was first reported by Women’s Wear Daily.
The asking rent and brokers involved in the deal were not disclosed. The median asking price for that retail corridor in the second half of last year was $2,550 per square foot, according to the Real Estate Board of New York.
“Placing our flagship store alongside the brands that help define culture will distinguish Meta Lab from traditional consumer electronics retail,” Meta’s creative director of wearables Matt Jacobson said in a statement.
In February 2023, Vornado revealed that its joint venture Crown Acquisitions and other investors defaulted on a $450 million non-recourse loan at 697-703 Fifth Avenue that matured two months earlier. Vornado worked out a loan modification six months later, according to Traded.
While this is Meta’s first significant retail effort in New York, it’s not the first time it has leaned on Vornado’s local real estate holdings.
Meta is the anchor tenant at the Farley Building at 390 Ninth Avenue, signing a 15-year lease for 730,000 square feet in August 2020, despite the uncertainty amid the pandemic. As a result, Zuckerberg’s company scored a discount, agreeing to pay a starting rate of $109 per square foot, ultimately saving 9 percent when considering all concessions.
There was noise about a potential disposition of the Farley Building several years ago, but nothing has come of it.
Additionally, Meta allowed 275,000 square feet at 770 Broadway to expire a couple of years ago, though it held on to 500,000 square feet at the building.
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