Ceruzzi Properties and SMI USA are on the hunt for a development partner at 520 Fifth Avenue.
A handful of developers are said to have been looking at the property, which is slated to be home to a roughly $500 million mixed-use development. The top contenders, according to sources, are Zeckendorf Development and Gary Barnett’s Extell Development — which is also partners with SMI on Central Park Tower.
Ceruzzi Properties, whose namesake founder Lou Ceruzzi suddenly died last August, purchased the lot in 2015 for $275 million with partner SMI. The U.S. arm of Shanghai Municipal Investment is said to own a nearly 94 percent stake in the development plot, according to a source, which pegs Ceruzzi Properties’ share of the site at roughly $16 million. It wasn’t immediately clear what size stake a new partner would take, but both Ceruzzi and SMI would stay in the deal, sources said.
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Ceruzzi Properties and SMI — which co-own the ground lease on the Lipstick Building and are working on a luxury condominium tower at 138 East 50th Street — snagged 520 Fifth from Joe Sitt’s Thor Equities. The partners were reportedly planning to move ahead with Thor’s original concept for the site, which included a 71-story tower with a hotel and condominiums above a retail base.
Whether or not a new partner would make alterations to those plans is unclear. A source said Zeckendorf was considering a private hotel club concept.
In July 2017, Ceruzzi Properties and SMI landed a $200 million bridge loan from Mack Real Estate Credit Strategies to cover predevelopment costs. That financing carries an 18-month term with the option to extend for an additional year, meaning its first maturity date is likely in early 2019.
Representatives for Ceruzzi, Extell and Zeckendorf declined to comment. A representative for SMI could not immediately be reached.
Will Parker and Hiten Samtani contributed reporting.