The iconic Neiman Marcus building in Beverly Hills has been sold to Ashkenazy Acquisition Corp., a New York-based real estate investment firm. The luxury department store will continue its operations at the 9700 Wilshire Boulevard location under a new long-term lease agreement.
Saks Global, the parent company of Neiman Marcus, confirmed the sale as a strategic move to manage its finances. While the sale price remains undisclosed, the transaction underscores the enduring strength of the Beverly Hills luxury retail market.
Key Takeaways
- The Neiman Marcus building at 9700 Wilshire Boulevard has been sold to Ashkenazy Acquisition Corp.
- Neiman Marcus will remain as the tenant under a long-term lease, ensuring no disruption to shoppers.
- The sale is part of a broader strategy by parent company Saks Global to address its financial obligations.
- This acquisition expands Ashkenazy's significant real estate portfolio in Beverly Hills, which also includes the nearby Saks Fifth Avenue building.
A Strategic Real Estate Transaction
The sale of the Beverly Hills Neiman Marcus property is a calculated financial maneuver by its parent company, Saks Global. A company spokesperson described the deal as a strategic decision to sell the land and building while securing the store's future through a long-term lease.
"This opportunistic real estate transaction does not impact our day-to-day operations. We remain committed to serving our loyal Beverly Hills customers," a Saks Global spokesperson stated.
This move allows Saks Global to unlock capital from its real estate assets. The company, which also owns Saks Fifth Avenue, Saks Off 5th, and Bergdorf Goodman, has been exploring various options to improve its financial position. These options have included selling properties and raising new financing to manage debt obligations.
The New Owner: Ashkenazy Acquisition Corp.
The buyer, Ashkenazy Acquisition Corp., is a private real estate investment firm with a significant portfolio of high-profile properties. This purchase adds another premier asset to its holdings in one of the world's most prestigious shopping districts.
Notably, Ashkenazy already owns the former Barneys building on Wilshire Boulevard, which is currently occupied by Saks Fifth Avenue. This latest acquisition solidifies the firm's presence in the coveted Golden Triangle of Beverly Hills.
Ashkenazy's Focus on Luxury Corridors
In a statement, Ashkenazy Acquisition Corp. highlighted the importance of the deal, noting it "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 firm's strategy centers on acquiring iconic properties in prime locations, and the Neiman Marcus building, a fixture since 1979, fits this profile perfectly.
Beverly Hills Retail Market Remains Strong
Despite broader economic uncertainties, the luxury retail real estate market in Beverly Hills continues to demonstrate remarkable resilience and strength. Real estate experts familiar with the area describe the market as one of the most robust in the country.
According to Jay Luchs, a real estate broker at Newmark who was not involved in the sale, the demand for retail space in this area is exceptionally high. "This is probably the best it’s ever been in Beverly Hills," he commented, noting that there is "essentially nothing available" for lease on the famous Rodeo Drive.
A Trend of Ownership
A growing trend among top luxury brands like LVMH, Chanel, Hermes, and Richemont is to purchase their store locations rather than rent them. This shift signals a long-term commitment to the Beverly Hills market and reflects the immense profitability of these flagship stores.
This trend of brands buying their own real estate is a powerful indicator of market health. "They don’t do that unless they’re making a tremendous amount of money, unless they want to be there forever," Luchs explained. It solidifies the status of Los Angeles and Beverly Hills as a critical global market for luxury goods.
The Future for Neiman Marcus
For customers of the Beverly Hills Neiman Marcus, the transition in property ownership will be seamless. The store, which has been an anchor of the local luxury scene for over four decades, will continue to operate without interruption.
The long-term lease agreement ensures stability for the retailer's physical presence. This sale-leaseback model is a common strategy in corporate real estate, allowing companies to convert illiquid assets into cash for reinvestment into their core business operations or to pay down debt.
Saks Global's decision reflects a broader trend in the retail industry, where companies are re-evaluating their physical footprints and real estate holdings. By monetizing valuable property, the company gains financial flexibility while maintaining its retail presence in a key market.
The transaction ultimately serves the interests of all parties involved: Saks Global shores up its finances, Ashkenazy acquires a trophy property in a world-class location, and Neiman Marcus continues to serve its affluent clientele in the heart of Beverly Hills.
