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Zara Billionaire Buying Rental Tower in New York City for $500 Million
July 18, 2022

Zara Billionaire Buying Rental Tower in New York City for $500 Million

by The CE Shop Team

Fast-Fashion Meets Hot Real Estate Market 

Zara’s CEO, Amancio Ortega, the leader of the fast-fashion brand known globally, is under contract to buy a rental tower in New York City’s Financial District to the tune of $500 million.  

Who is Amancio Ortega? 

Before Ortega became a household name in fast fashion, he was a young delivery boy in the streets of Spain. Working in the retail industry from an early age, Ortega quickly learned the ins and outs of the business and went to create his own bathrobe business using inexpensive materials to create efficient clothing.  

In 1975 he started Zara, following his earlier model of using less-expensive materials to create efficient-ready-to-wear clothing that became the flagship company of his holding company Inditex Vogue Group.  

His risks early on paid off handsomely, as he’s now worth a cool $58 billion. Using his wealth wisely, he’s invested in a number of properties from office buildings and historic properties, to hotels and leasing land out to tech giants.  

His portfolio is diverse when it comes to the types of real estate owned, and his holdings have increased to $17.2 billion, making his portfolio the richest among Europe’s uber-wealthy.  

When it comes to real estate investment in the U.S., Ortega has pumped more than $2 billion into the market, primarily in South Florida and now New York City.  

Zara Billionaire Buying Rental Tower in New York City for $500 Million

FiDi Rental Tower Details 

For his first big multifamily real estate investment, Ortega is making quite the splash. Ortega’s real estate group, Pontegadea, is buying the 64-story tower that spans nearly 330,000 square feet. This is a massive investment for the group, with the deal costing roughly $1 million per unit.  

When it comes to being a landlord, Ortega is no rookie. He’s leased out his estates to the likes of Facebook and Amazon, along with a bank building near the White House.  

Prior to this deal, Ortega’s Pontegadea group historically invested in workplace and retail properties.  

Ortega, who Forbes estimates is worth $58 billion, is the chairman of the Inditex Vogue Group, as well as the founding father of Zara. Pontegadea, the real estate group, owns roughly 59% stake in Inditex Vogue Group, and reported a net revenue of €666 million in 2020, down from roughly €1.8 billion in 2019. 

This $500 million deal is the most recent in a flurry of condo tower megadeals in NYC, showing just how confident investors are in demand for luxury rental units.  

Demand for Luxury Rentals is Sky High 

In the early days of the pandemic, it seemed that rents and the desire to rent would drop, which they did. This lasted no more than six months and immediately picked up, officially ending the days of bargains in NYC. Demand for rentals was above that of pre-pandemic levels, which quickly absorbed any available luxury or doorman buildings on the market.  

“There’s been an inversion, a tremendous boom in the upper part of the market. It’s the opposite of what it was pre-pandemic,” said the Jonathan Miller of Miller Samuel, in the Elliman Report

To much surprise, the days of bargain apartments and empty units had come and gone, and NYC quickly found itself with a shortage of luxury apartments.  

If Ortega’s investment of $500 million seems like a high cost, which it is, consider that in the FiDi area the rent for units of luxury apartments ranges between $10,000 a month to upwards of $30,000. The current rent is always subject to change, especially when the listing inventory for all apartments, luxury and non-luxury, are down about 70% from May of 2021.  

In fact, Airbnbs outnumber New York City apartments, with around 13,000 short-term rentals listed on Airbnb and Vrbo.  

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