IKEA Pays $213 Million for Soho Building in Bold Push Into Manhattan

1 October 2025

A worker walks past a logo of IKEA on the facade of an IKEA store in Barcelona, Spain April 26, 2024. REUTERS/Nacho Doce

In a move that signals a new chapter in its U.S. evolution, IKEA’s investment arm, Ingka Investments, has purchased a prime property in Manhattan’s Soho neighborhood for $213 million, with plans to launch a two-floor retail space complemented by office floors above. The 53,000-square-foot building will host the IKEA store on its first two levels, while the upper four stories will be transformed into leasable office space, giving the company a mixed-use presence in the heart of the city.

This acquisition builds on a larger $2.2 billion U.S. expansion strategy that IKEA first announced in 2023. Although IKEA has traditionally favored suburban, big-box formats, in recent years the company has pivoted to more urban footprints, opening stores in Paris and London, and now aiming to embed itself deeper in major U.S. cities.

The Soho transaction took place at 529 Broadway, in a six-story building currently occupied by Nike, which connected property insiders later confirmed IKEA acquired from a group including real estate investor Jeff Sutton. In its statement, Ingka heralded the acquisition as one of four strategic property investments meant to secure its presence in key global retail hubs.

Retail analysts view the deal as a sign of IKEA’s confidence in urban retail dynamics despite high rents and the operational constraints posed by denser city centers. By owning the property rather than leasing, the company ensures long-term control over its location and can better manage the balance between retail and office uses.

This Soho store will be smaller than conventional IKEA locations its footprint contrasts with IKEA’s traditional format, such as its Red Hook, Brooklyn superstore spanning over 336,000 square feet. But the company has previously tested smaller city formats: a planning studio on Manhattan’s Upper East Side and a customer meeting point in Midtown, although those experiments had mixed outcomes.

The upper floors’ conversion to office space points to a hybrid model increasingly popular among retailers in dense urban zones. By combining retail with office leasing, IKEA can diversify revenue streams and soften exposure to retail volatility.

In announcing the acquisition, IKEA executives emphasized their mission to bring the brand closer to city-dwelling customers. Javier Quiñones, CEO and Chief Sustainability Officer at IKEA U.S., said the move underscores a pledge to “meet customers where they are.” Meanwhile, the investment side noted that property ownership in prime locations helps IKEA maintain affordability while anchoring its presence in landmark retail corridors.

The timing also aligns with other IKEA real estate maneuvers in New York. The company is already working on a retail component combined with offices at 570 Fifth Avenue, housed within a new high-rise development led by developer Extell. That project, scheduled to open in coming years, will further solidify IKEA’s urban footprint in Manhattan.

For the local community, the development brings both excitement and questions. Soho’s retail landscape is notoriously competitive, and integrating a major global brand into a historically independent neighborhood will test IKEA’s ability to connect with urban consumers without losing local character. Landlords, tenants, and local businesses will watch closely how the new store affects foot traffic, leasing dynamics, and neighborhood synergy.

While the investment is bold, it is not without risk. The more compact format may limit display breadth and warehouse capacity, necessitating efficient logistics and last-mile fulfillment strategies. Also, macro factors like rent inflation, supply chain pressures, and consumer behavior in city centers will all test the viability of this more urban-intensive model.

Yet IKEA seems poised to adapt. By marrying retail with office usage and anchoring itself through property ownership, the company may well be charting a new blueprint for global retailers aiming to thrive in dense urban settings.