New York City — Ingka Investments, the investment arm of Ingka Group, which owns and operates a majority of IKEA stores globally, has purchased a one-third stake in the development of a 1 million-square-foot mixed-use tower underway in Manhattan. As part of the arrangement, IKEA will open a store across two base levels at the building, 570 Fifth Avenue, which will include a corner entrance along Fifth Avenue.
Extell Development Co. is the master developer of 570 Fifth Avenue, which will feature Class A retail space and offices at the intersection of Manhattan’s Plaza and Grand Central districts. The project marks the largest development on Fifth Avenue in more than 60 years, according to Ingka Investments.
“We have been working on assembling this project for almost two decades, and Ingka Investments’ substantial commitment allows us to move forward with the construction and leasing of the best new office building in New York,” says Gary Barnett, founder and chairman of Extell Development, which will retain a two-thirds ownership stake in the development.
Ingka Investments’ stake in the tower includes the planned IKEA store. IKEA will open a “customer meeting point,” the retailer’s small-format store prototype, within the tower’s 80,000 square feet of planned retail space. For comparison, a typical “blue box” IKEA store spans more than 300,000 square feet and features multiple levels of showrooms, a warehouse, covered parking and a café.
Since 2019, Ingka Group has opened smaller stores and shops in major cities, including Tokyo, Madrid, Paris and London, as well as planning studios in Vienna, Barcelona, Berlin and Prague. Javier Quiñones, CEO and chief sustainability officer of IKEA U.S., says that the retailer is looking to grow more in city centers such as Manhattan in the coming years.
“While we are in the very early stages of planning for the IKEA location, we can promise to deliver an experience that is full of inspiration and designed to meet the home furnishing dreams of the many New Yorkers,” says Quiñones.
Extell Development and Ingka Investments plan to achieve LEED Gold certification at 570 Fifth Avenue, which is set to open in 2028. Meritz Securities and IGIS provided construction financing for the project.
Ingka Investments is based in Leiden, the Netherlands. The company owns and operates 537 IKEA retail locations, including 373 blue box stores, 26 city stores and 138 stores in other formats in 31 countries.
— John Nelson