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The Journal News
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November 07, 2006
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| Flagship Lord & Taylor likly to shrink but not move |
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| Alison Bert |
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The new owner of Lord & Taylor is exploring the ramifications of shrinking its flagship store on Manhattan's Fifth Avenue and using the space above it for office space or a hotel.
NRDC Equity Partners LLC, a private company based in Purchase, acquired the Lord & Taylor chain from Federated Department Stores Inc. last month for $1.1 billion.
Yesterday, the president of NRDC, Richard Baker, denied media reports that his firm was thinking of moving the flagship to another Manhattan location or even the suburbs.
"We fully expect Lord & Taylor to remain on Fifth Avenue in New York City," he told The Journal News. "All we're saying is that the Lord & Taylor on Fifth Avenue, we believe, is too large and that we are studying the ramifications of shrinking it. If we did shrink it, other alternative uses such as an office or hotel could be located above the store."
The building has good potential as a mixed-use property, said John Cicero, managing principal of Miller Cicero LLC real estate advisory services, which deals with commercial real estate in Manhattan as an affiliate of Miller Samuel Inc.
"The office market itself has been doing gangbusters," he said.
Cicero cited the building directly across the street from Lord & Taylor, at 425 Fifth Ave. between 38th and 39th streets, which was opened for retail, commercial and residential use in late 2002 and sold out its units last year.
Jonathan Miller, president and CEO of Miller Samuel Inc., said the city is in need of more hotel space now that many hotels have been converted to condos.
"The city is very concerned about that because tourism is a large economic factor here and so are trade conventions at the Javits Center," he said, "and it's very difficult to market the city in other areas of the country without enough hotel rooms. ... We've seen a few buildings that were slated to convert to condo be changed midconstruction to hotel."
Candace Corlett, a principal of WSL Strategic Retail, said she's impressed with the innovative merchandise at the flagship Lord & Taylor. She called it a "well-kept secret" and said the company should bring that same fashion flair to its suburban stores.
"The merchandise has a lot more energy; it's a lot more innovative and stylish than it used to be," Corlett said.
"But I think it's almost like you only find that at the flagship store; you don't find that innovative fashion statement in the suburban stores," she said. "I think they need to put their best foot forward where their shoppers are because clearly their shoppers are out in the suburbs, they're not heavily on Fifth Avenue."
NRDC Equity Partners is a joint venture between Richard Baker and Robert C. Baker, principals of National Realty & Development Corp., and William Mack and Lee Neibart, Partners of Apollo Real Estate Advisors LP. NRDC Equity Partners acquires companies in the retail, leisure, lodging and commercial real estate sectors. In February, it acquired Linens N' Things with Apollo Management for $1.3 billion.
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