The Kaufman Organization’s ongoing renovations of three Midtown South office buildings in what was once known as the “Ring Portfolio” are moving forward with a new name and a very new look.
The company, which in April acquired four buildings that it now calls the “Madison Square Portfolio” through a 99-year lease with Extell Development Company, is sprucing up three of the long-vacant properties—19 West 24th Street,13 West 27th Street and 45 West 27th Street—ahead of a planned June 2015 occupancy date, said Grant Greenspan, a principal with Kaufman. (The fourth building in the portfolio is already open at 119-125 West 24th Street.)
Gary Barnett‘s Extell Development Company is slated to develop residential units in what marks phase three of City Point, the mixed-use development in Downtown Brooklyn, Commercial Observer has learned.
The development deal, which is in the contract stage, represents Mr. Barnett’s first foray into Kings County. The prolific developer is undecided about whether the project will be a rental or a condominium, sources close to the deal said, but no affordable housing has been included in the plans.
With 100 tenants either moved out or in the process of moving out of 2 West 47th Street in Midtown’s Diamond District, business owners and brokers in the area are speculating about what will become of the building with few definitive answers available.
As whispers swirl around the district about a potential hotel on the building’s footprint via a lot assemblage by Extell Development Company, nobody seems to know for sure what will become of the building that once housed ABS Partners Real Estate’s jewelry exchange on the ground floor and top jewelry designers like Sasha Primak in the floors above.
In a vault in the middle of the stretch of West 47th Street between Avenue of the Americas and Fifth Avenue that’s known as the Diamond District, a longtime merchant keeps his literal crown jewels: a set designed in the 18th century for the French royal family. The jewelry salesman and collector places the value of the tiara, bracelet, necklace and earrings with origins in the Bourbon-Medici clan at $1 million, but those jewels are not for sale, he says. He says he plans to donate the piece to a museum someday, and his employees show off less pricey merchandise like a $650,000 choker and a $565,000 necklace. If those items seem too expensive, a store employee tells Commercial Observer, he’s happy to point out items that sell for closer to $500,000.
Real Estate and Politics
Thor Equities refinanced its retail condominium at the base of luxury co-op The Carlton House at 680 Madison Avenue with Morgan Stanley, a source confirmed to Mortgage Observer. The $175 million first mortgage closed last month, according to records recently filed with the city.
Thor purchased the building’s block-long retail space for $277 million in January 2013—one of the highest prices ever paid for a retail property on Madison—from Extell Development, which is in the process of converting the upper floors into cooperative residential units.
The five controversial tax break eligibilities for luxury housing developers that state lawmakers and Governor Andrew Cuomo carved out for five developers in January 2013 legislation have sparked controversy, speculation and investigation, but only two of the developers have actually applied for and received the 421-a exemptions thus far.
The eligibilities for Silverstein Properties at 99 Church Street, Thor Equities at 520 Fifth Avenue, Friedman Management at 113 Nassau Street, Fisher Brothers at 78-86 Trinity Place and Extell Development Company at 157 West 57th Street reportedly showed up on a subpoena for the Real Estate Board of New York drafted by investigators with the Moreland Commission to Investigate Public Corruption before the governor’s office intervened. But three of the developers have yet to apply to the city Department of Housing Preservation and Development (HPD), and the other two received the exemption in exchange for building affordable housing.
Kaufman Organization and Principal Real Estate Investors have closed on their acquisition of four former Ring buildings, totaling 341,441 square feet in Nomad and the Flatiron District, from Extell Development Company.
As Commercial Observer previously reported, the deal included 13-15 West 27th Street, 45 West 27th Street, 19 West 24th Street and 119-125 West 24th Street. Depending on the valuation, the 99-year net lease cost between $175 million and $200 million, according to David E. Ash of Prince Realty Advisors, the lone broker in the deal.
Masters of Real Estate
Nonprofit United Cerebral Palsy of New York City is expanding and relocating its current program after cutting a 30-year lease for 218,000 square feet at 80 West End Avenue.
The deal was made possible after the organization negotiated a contract to sell its current home at 122 East 23rd Street, a four-story building it has owned Read More
The Commercial Observer will host its annual Masters of Real Estate conference on October 16 at The Metropolitan Club, located at 1 East 60th Street. Beginning at 8am, the event will feature three panel discussions on the State of New York City Real Estate, the State of Opportunistic Investments and the State of the Capital Markets.
Extell Development Company is under fire for its plans to create what some are calling a “separate but equal” arrangement at 40 Riverside Boulevard on the Upper West Side.
The developer reportedly plans two separate entrances for low-income residents and their high-income tenants living in luxury pads.
“This ‘separate but equal’ arrangement is abominable and Read More
Real estate investment and finance firm Princeton Holdings has sold its interest in a one million square foot portfolio of commercial properties located in Manhattan’s Midtown South submarket for $74 million to Extell Development Company.
Buyer Extell Development Company significantly boosts its existing stake in the portfolio and, having gained at least a 50 percent stake in Read More
An ownership feud over management of a largely vacant Midtown South property will be decided at auction in August. The 16-story prewar office building at 251 Park Avenue South, which sits nearly 70 percent vacant in the heart of the red hot submarket, is to be sold at public auction on August 28, by order of the Supreme Court of the State of New York.
The building is owned “tenancy in common”–a form of simultaneous ownership in a single property by two parties—by F.M. Ring Associates and an investor, reportedly Gary Barnett’s Extell Development.
Post-Tropical Storm Sandy
Steve Wiktoff paced back and forth in a conference room at his partnership’s New York City office, eager to talk about his latest endeavors, but just as eager to tackle the other 10 commitments that had come his way.
In the face of one of the worst natural disasters in the city’s history, commercial real estate landlords braced for Hurricane Sandy, employing every measure possible to hold property damage to a minimum and keep tenants safe.
But not even prophetic foresight could have allowed the city’s landlords—or New York City as a whole—to prevent much of the destruction that the mammoth storm wreaked across the five boroughs.
The road to recovery, especially in low-lying coastal areas like Staten Island, Coney Island and the Rockaways, will take months, if not years. Lower Manhattan went dark for days, with many companies largely shutting down due to power outages and salt water flooding, which is especially corrosive to mechanical equipment.
“It’s—It’s—It’s just a mess,” said Jordan Barowitz, a spokesman for the Durst Organization, who struggled to find words to describe the destruction in Lower Manhattan.
Gary Barnett continues to bulldoze his way across the city. Just last week, his Extell Development unveiled plans for a new tower at Riverside South; found a partner for a stalled 50-story hotel near Times Square; and secured $700 million in financing from Abu Dhabi toward One57, the condo-hotel tower on West 57th Street that will be the tallest, and likely most expensive, when it is completed. As if that were not enough, the developer has begun work just down the block on another of its long-simmering projects.