LCOR buys hot corner

Real Estate Weekly, March 28, 2001 by Natalie Keith

Gets Fifth and 42nd for $35 Million

LCOR purchased the northeast corner of 42nd Street and Fifth Avenue, a site that has been a target for redevelopment for years.

The sale was completed two weeks ago for a reported $35 million. The purchase includes three buildings at 503, 505, and 507 Fifth Ave., according to published reports.

A spokesman for LCOR confirmed that the company has purchased the buildings but declined further comment.

The buildings were previously owned by investor Mitch Rutter, of Essex Capital Partners, who bought them in March 2000. Since buying the property, Rutter cleared out the flea market and other office and retail tenants and began interior demolition.

"The decision to sell was motivated by our determination that given the current state of the market and the speculative nature of the project, it was better suited to an institutional buyer with more institutional sources of capital," Rutter said.

Despite deciding to sell the property, Rutter said he was bullish about redevelopment prospects for the site.

"We think LCOR will be able to capitalize on the work we've already done on the site," Rutter said. "The site remains one of the best in the city."

Fred Cerullo, president and chief executive officer of the Grand Central Partnership, said the transaction was a positive development for the neighborhood.

"Development of 503 Fifth Avenue is truly a boon to the Grand Central neighborhood and is another component of the exciting new construction that is transforming 42nd Street between Madison and Fifth Avenue," Cerullo said.

On its company website, LCOR describes itself as a "private-partner business" that works with government agencies, public authorities, and university officials to optimize the value of assets. The company has completed more than 15 million square feet of commercial space in 15 states.

Among local projects LCOR has been involved with are a $3 billion passenger terminal currently under construction at JFK Airport, the $292 million Foley Square Federal Office Building project, and the $55 million mixed-use University Center project at Rutgers State University.

LCOR has also done numerous residential projects in places such as Garland, Texas; Naperville, Ill.; and Germantown, Md.