It’s been a wild year in the world of investments and tech, and perhaps no single investment company has made bigger waves than Fortress Investment Group. This New York-based investment firm has long been known for blazing a trail when it comes to innovative investments and massively bold moves that consistently pay off in the long run. But it’s possible that their most recent move has been their most striking gamble yet. And it’s already making an impact in Florida and around the nation.
Fortress Investment Group was founded in 1998, and since then has gone on to become the first large private equity firm in the US to publicly trade on the New York Stock Exchange back in 2007. They’re now existing under the umbrella of SoftBank Group, who purchased them in December of 2017. But their new ownership has done little to change their flair for making big investments and challenging the perceptions of what a large investment firm is capable of achieving.
Purchasing the Tiffany Building
Believe it or not, the Virgin Trains project hasn’t been the only high-profile project taken on by Fortress Investment Group. In fact, in many circles they’ve made an even splashier purchase in recent months. They bought the world-famous Tiffany’s Building on Worth Avenue.
This purchase came amidst questions of the iconic building’s future in Palm Beach, its 16,374 square feet of prime real estate presenting a massive opportunity for many buyers. But Fortress Investment Group was able to secure the purchase for $20 million, a rate of approximately $1,200 per square foot. This came after the building spent two years on the market as the centerpiece of one of the United States’ most expensive retail and shopping blocks.
The Tiffany company has been the primary tenant of the building for over 25 years, leasing over 65% of the space. They’ve also invested millions in upgrading the building with high-end features like marble floors.
Previously, the Tiffany building had been owned by prominent investment family the Madden Family Associates. They owned the property for several decades, deciding to sell in 2016 for personal reasons and the conditions of the current market.
But perhaps the most fascinating element of this story is learning how it all came together in such a massive, iconic sale of such a massive and iconic building. This is particularly true when you consider that Worth Avenue is known for being a rare place for properties to change hands. Most building on the street are owned by the same owners for years or even decades at a time. This is partly due to just how desirable a location on the street really is, making most owners extremely reluctant to even consider giving up their spot on the block.
So how did this deal come together? It took a wide range of perfect conditions to make it happen.
How the Sale Came Together
It all started when the seller, Madden Family Associates, decided to list the property in 2016 for family planning and market condition reasons. When Fortress Investment Group stepped up as a buyer in 2018, the deal was on. Franklin Street provided Greg Matus, senior vice president of investment sales, to negotiate the transaction between the two parties. Franklin Street also provided property management in the form of their own Lisa Jesmer.
Fortress Investment Group saw this purchase as an opportunity to gain an asset on one of the world’s most famous shopping blocks, consistently ranked in the top 10 most expensive real estate districts on the western side of the globe.
And the building brings its own rich history and fame. Built back in 1950, Tiffany & Co. became a tenant in 1991 and introduced upgrades like high-end steel doors, its famous clock icon, and sculptures as well as gorgeous marble floors.
Companies Involved in the Tiffany Sale
Fortress Investment Group made the purchase on behalf of partner Hyde Retail Partners and Kean Development. Kean Development has a presence in Palm Beach, while Hyde Retail partners is based in Florida—making this a somewhat local purchase.
The plan for the building is to convert the two-story building’s upper level into a high-end office space while keeping the first floor as Tiffany retail space. Kean Development is known for building and developing luxury homes and high-end communities, in addition to high-end commercial projects and spaces around the country.
Meanwhile, Tiffany plans to expand their retail space on the first floor to a second storefront on the other side of the corner, offering a better flow of foot traffic and more opportunities for luxury shoppers to enter the building.
As should now be clear, Fortress Investment Group is a major player in some of the most high-profile projects and purchases in multiple industries. Their purchase of the Tiffany building in Florida gives them an interest in one of the world’s most desirable high-end retail destinations.
Overall, Fortress Investment Group is sure to continue to surprise with its bold investments, all while building an ever-diversifying portfolio that’s guaranteed to result in greater success. The only question that curious watchers of this company may ask is—what will Fortress Investment Group do next?