Chanel Eyes $450M Retail Acquisition at 655 Madison

Chanel is reportedly in advanced negotiations to acquire the retail base of Extell Development’s planned luxury condo tower at 655 Madison Avenue for roughly $450M, according to Commercial Observer.

Deal Details

The deal would give Chanel around 65K SF of prime retail space on Madison and East 60th Street—at a blended rate of about $7K PSF—sources told Commercial Observer.

The transaction, still in flux, would mark a major real estate move for the luxury fashion house and provide Extell with a high-profile anchor tenant that could help secure financing for the planned development.

The retail package includes both upper- and lower-level floors, offering Chanel a significant presence at one of Midtown Manhattan’s most prestigious intersections.

From Barneys to Madison

This would not be Chanel’s first attempt to buy into Manhattan real estate. The company was previously in talks to purchase a portion of the former Barneys building at 660 Madison Ave for $600M, but those negotiations fell apart over a brokerage fee dispute.

This time around, Chanel is being advised by Paul Muratore of Insite Luxury Consulting. Neither Chanel nor Extell, led by chairman Gary Barnett, have commented publicly on the potential deal.

Chanel already has a footprint in the area, including a watch boutique at 730 Fifth Avenue and another fashion storefront on East 57th Street, just blocks away.

Land Assembly Push

Extell has been actively assembling the 655 Madison development site since acquiring the main office building from Williams Equities in 2023 for $160M, with financing from Tyko Capital and backing from Elliott Investment Management.

In February, Barnett added three adjacent townhomes—33, 35, and 39 East 60th Street—for another $103.3M. That acquisition added 80 feet of frontage and expanded the site to a full 16K SF footprint, with roughly 192K SF of buildable space.

The combined site now boasts 102 feet of Madison Avenue frontage—where Chanel would likely situate its flagship storefront—along with an equal stretch running eastward on East 60th Street.

Demolition in Progress

Although Extell hasn’t released renderings or named an architect, demolition plans are already in motion.

Earlier this month, the firm filed permits to demolish the three townhouses, which no longer house residential tenants. Restaurants Phillipe and Il Mulino remain open but are expected to vacate by summer.

The project site also borders Zeckendorf Development’s 520 Park Avenue condo tower, which could limit window exposure on certain elevations.

Looking Ahead

If finalized, the Chanel deal would be one of the largest retail acquisitions in NYC in recent years, signaling growing momentum among global luxury brands looking to own rather than lease in top-tier locations.

For Barnett, a signed deal with Chanel could serve as the anchor needed to get shovels in the ground on his next high-end residential tower.