Sagging rents in Soho just paid off for fashion house Hugo Boss.
The German suit seller is moving from its current digs at 555 Broadway to a bigger space up the block where it will reopen in the Spring of 2020, sources told The Post.
The move comes as the lease on Hugo Boss’s current 6,600-square-foot store was getting set to expire with no apparent plans by the retailer to renew — raising concerns that Soho could lose its business to another neighborhood.
“It’s big news that they are staying in Soho and moving to a better corner,” said one person familiar with the deal who was not authorized to speak. “There was a lot of skepticism as to whether they would stay in Soho or leave the market entirely because their own space has been marketed for over a year.”
The opportunity to upgrade opened up at 568-578 Broadway on the northeast corner of Prince Street after the owners of the Prince Building finally gave up on plans to lease a much larger space of 19,250 square feet at an asking rent of $10 million per year.
That space had been occupied by Armani Exchange for 25 years before Artists & Fleas took over for the last two years before closing over the summer.
But the owner was unable to fetch $10 million a year at a time at a time when the average asking rents along Broadway in Soho declined 12 percent to $491 per foot just since last fall, according to the latest Real Estate Board of New York retail report. The average asking rent had peaked at $971 in the spring of 2015.
So rather than keep the space empty, the owner agreed to divide it, giving Hugo Boss 7,000 square feet, including 5,000 square feet on a ground floor with 18-foot high ceilings and 2,000 square feet on the lower level.
The asking rent was $700 per foot for the ground and $150 per foot for the lower level.
The remaining 4,000 square-foot space on the ground plus lower level and sub-cellar space is being marketed for $3 million.
Bob Gibson and Davie Berke of JLL represented the tenant while the ownership group of Aurora Capital, Allied Partners and A&H Acquisitions was represented by Aurora.
The bad news for Broadway: The fashion house’s current space at nearby 555 Broadway is still for rent.
The companies declined comment or could not be reached.