Internationally Renowned Luxury Brand Burberry Takes On Madison Avenue
Burberry, the internationally renowned luxury brand, was rapidly expanding within antiquated, inefficient space in a building that did not evoke the image of the company’s high-end brand. Burberry had been negotiating directly with their landlord for desperately needed expansion space. With approximately three years remaining on its existing lease, Burberry was anxious to satisfy its immediate space needs so that it could begin exploring future occupancy alternatives. Their landlord informed Burberry that there were no short-term availabilities. However, Savills was aware that there was a pre-built unit available for a long-term commitment. The landlord had persuaded Burberry to enter into a discussion of a long-term renewal of all their space (approx 60,000 sq ft.). Burberry retained Savills and at Savills advice immediately put all negotiations on hold.
It was estimated that in order to remain in its space long term, Burberry would incur a $9 million phased renovation of its entire premises. This was viewed by the client as a highly disruptive and costly process to remain in an inferior building. Savills embarked upon a strategy whereby we first contacted every tenant in Burberry’s building and opened a dialog with their Landlord. Simultaneously, Savills performed an exhaustive search for suitable short-term “Band-Aid” space to hold Burberry over until their lease expiration coming up in three years. Coinciding with the short-term search, Savills contacted every major landlord with the long-term goal of finding a significant building with branding rights and efficient floor plates for Burberry’s long term needs.
Savills located 8,000 square feet for Burberry’s short-term needs located two blocks from their headquarters and negotiated a lease just short of lease signing. Savills then contacted Burberry’s current landlord and used the relocation as leverage to convince them to lease Burberry the pre-built space coterminous with their existing 60,000 square feet. Additionally, Savills created an opportunity to relocate Burberry’s headquarters to a re-development project in Midtown Manhattan. 444 Madison Avenue had been recently acquired by Westbrook Partners and was planned to undergo a $22 million capital improvement program, with renovations including a newly redesigned and enlarged lobby and entrance, a redesigned retail storefront with a glass façade re-skin on the second and ground floors and cleaning to restore the limestone and brick exterior to original conditions.
Savills negotiated for favorable rents and concessions, significant expansion/ROFO rights, renewal options, signage at the entrance of the building as well as iconic lit rooftop signage facing three directions – replacing the old “New York Magazine” signage. In order for the transaction to be completed, Savills successfully negotiated a lease take-over of Burberry’s remaining obligation at 1350 Avenue of the Americas by the landlord of 444 Madison.
Upon the completion of the headquarters transaction, Savills negotiated for two retail stores flanking the lobby entrance of the building further branding the property now known as The Burberry Building.