The ground lease agreement gives SL Green the ground leasethrough December 31, 2029, at a rate of about $11.2 million peryear. Landgray Associates, the owner, also agreed to give SL Greenan option to expand its lease when it comes due in two 15 yearrenewal options. Should the firm realize these options SL Greencould hold the ground lease through December 31, 2080.

Additionally, the company has leased 40,000 sf to GiorgioArmani. The Italian retailer will take the four-floor space at 717Fifth Ave. for 15 years. The rental rate was not released but rentsin the area are said to be around $1,200 per sf. The store, whichwill be located on the corner of 56th Street and Fifth Avenue, isexpected to open in 2008 and is part of the company's plannedexpansion into the US.

PBS Real Estate's Laura Pomerantz represented Armani. At thesame time SL Green and Jeff Sutton, have agreed to purchase floorstwo and three at the 468,000-sf property."We are delighted thatGiorgio Armani has selected 717 Fifth Ave. as its newest, mostprominent New York retail location," says SL Green president andCEO Andrew Mathias. "We embarked on our joint venture partnershipwith Jeff Sutton just three years ago, aiming to identify andinvest in underperforming retail assets. The program has been aresounding success to date, much to the benefit of SL Green'sshareholders. We are looking for additional opportunities tomaintain our momentum."