NRDC, Apollo Get Lord & Taylor

(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)

CINCINNATI-A joint venture between the principals of National Realty & Development Corp. (NRDC) and Apollo Real Estate Advisors has acquired the 48-unit Lord & Taylor portfolio from Federated Department Stores for $1.2 billion. Federated acquired the upscale department-store chain last year as part of its acquisition of May Department Stores and had been shopping Lord & Taylor over the past few months.

This is the second major retail deal of the year on which NRDC and Apollo have partnered. NRDC and private-equity firm and Apollo affiliate Apollo Management in February bought Linens ‘n Things for about $1.3 billion.

The Lord & Taylor venture, called NRDC Equity Partners, is being led by NRDC principals Richard and Robert Baker and William Mack and Lee Neibart, principals of Apollo Real Estate. The parties expect to close the deal in this year’s third quarter.

Jane Elfers will remain in the post of president and chief executive officer of Lord & Taylor, which she has held since 2003. “We are looking forward to working with NRDC and exploring new options for the Lord & Taylor brand going forward,” says Elfers in a statement. NRDC Equity Partners management says that Lord & Taylor’s real estate portfolio “is being reviewed and no decisions have been made on any individual stores.”

In March, Federated announced that it was closing five underperforming Lord & Taylors and converting another one into a Macy’s. Before the Federated acquisition, at the beginning of 2005, May closed 32 underperforming Lord & Taylor units. The closures marked the exit of the company from Southern and Western states.

NRDC’s Equity Partners group participated in the bidding process for a number of for-sale retailers last year, including Burlington Coat Factory, Pathmark and Toys “R” Us. Its parent company, based in Purchase, NY, owns 14 million sf of shopping centers across the country and is planning an additional two million sf of development.

Apollo Real Estate, was formed by Apollo Management in 1993 and has since overseen $5 billion in real estate transactions. Apollo Real Estate opened the 2.8-million-sf Time Warner Center in Manhattan with the Related Cos. in 2004. Earlier this month the New York City-based firm closed a $700-million investment fund.