August 19, 2015 08:00AM
By E.B. Solomont
Ceruzzi Properties and Chinese partner SMI USA are planning a condominium project at 520 Fifth Avenue with a total projected sellout of $1 billion, The Real Deal has learned. Town Residential will be marketing the condos, through its Town New Development division.
Ceruzzi and SMI, otherwise known as Shanghai Municipal Investment, paid Joseph Sitt’s Thor Equities $325 million for the property and another 60,000 square feet of air rights in a deal that closed late Tuesday, CEO Lou Ceruzzi told TRD. Sitt bought the site, located between 43rd and 44th streets, for $150 million in 2011.
Ceruzzi said 520 Fifth will have three levels of retail at the base, topped with 180,000 square feet of luxury condominiums that could fetch north of $1 billion. He declined to say how many condos the building would have, but he said the top floors would be combined into “larger penthouse apartments.” Ceruzzi said “in all probability” the building would also include a hotel with 150 to 180 rooms.
The property is currently vacant, after Sitt demolished two prewar buildings on the site when he bought it from developer Aby Rosen and Tahl-Propp Equities. In December, Thor filed an application for permits for the mixed-use building. Ceruzzi and SMI are now following through with those plans.
Sitt put the property up for sale earlier this year through HFF, asking $350 million. Thor is marketing the retail space at the base of 520 Fifth, including 85 feet of frontage on Fifth. “We are hoping to achieve $1,000 per square foot on the first floor,” Ceruzzi said.
520 Fifth is the second joint venture between Ceruzzi and SMI, which entered the New York market 10 months ago. Ceruzzi and SMI are also developing a 52-story hotel tower at 138 East 50th Street that is slated to have 764 rooms. “New York is the best market in the United States,” said Tom Tao, president of SMI USA. The two firms are actively looking for a third, large-scale investment to make together, Ceruzzi said.
In addition to its investments with SMI, Ceruzzi is also partnering with Kuafu Properties and Stillman Development on a $340 million, mixed-use development on the corner of 86th Street and Lexington Avenue. The project will include 50 new luxury condos.