It all started innocently enough: a single building with a fancy design, a couple of apartments in the $90-plus million range, a few billionaires looking to park their money in New York luxury real estate…
But several buildings (and tens of millions of dollars worth of apartments) later, one has to wonder whether the strip of über-luxury condominium development on 57th Street—nicknamed “Billionaire’s Row”—has finally run its course.
It is a question clanging around the minds and meetings of residential lenders this spring: What if the state repeals the decades-old 421a tax abatement? The law, a staple of New York City multifamily finance, has been renewed continually since the 1970s, but comes up for renewal this June. Such a scenario has lenders pondering a financing ecosystem steered almost exclusively toward condominiums and commercial developments such as hotels, or toward that rare development firm that could finance most of its rental project solo.
Indeed, the great multifamily minds of the city generally agree that the abatement is a key crutch propping up development here. And the one thing upon which politicians, lenders, renters and developers all agree is that new housing and improvements in existing apartments in New York City is necessary.
Despite the fanfare with which Extell Development’s luxury tower One57 hit the market in December 2011, sales at the building have slowed significantly in recent months. About 25 percent of the 94 units at Extell’s condominium and hotel tower was still without buyers as of December 2014, according to published reports.
Indeed, only one unit at the 75-story skyscraper was purchased in the third quarter of 2014, Bloomberg News reported in early December. Those figures came from a filing on the Tel Aviv Stock Exchange, where Extell sells debt, according to Bloomberg. The most recently recorded sale at One57 closed at a 20 percent discount to its asking price, according to city records. That unit went into contract in October 2011 and closed on Dec. 1, 2014.
Gary Barnett is the founder and head of Extell Development Company, a firm he started in 1989. As one of the city’s leading—and most divisive—contemporary developers, he has created amenity-laden condominiums like One57, the Orion and the Aldyn, hotels like the Hyatt Times Square and W Times Square and office towers like the International Gem Tower. Mr. Barnett started in the diamond trading business in Belgium and cut his teeth in the real estate industry buying shopping malls and office buildings in the Midwest. Extell’s current portfolio exceeds 20 million square feet. Commercial Observer recently sat down with Mr. Barnett in his conference room to talk about his aggressive development stance, his favorite project and the “poor door” controversy.
One57 was on fire over the weekend – literally. The fire reportedly started on a loading dock at the luxury residential tower on Saturday night and was brought under control around 10 p.m., but not before nearby resident and lawyer Michael Hurwitz prepared a lawsuit filed with the state Supreme Court against Extell Development.
“The whole area was in a blazing fire,” Mr. Hurwitz told Luxury Listings NYC. “It was a very close call … it was 100 percent unacceptable what was going on there.”
At a meeting last night, members of the Art Students League approved Extell’s controversial plan to cantilever a 1,424-foot skyscraper above the school’s landmarked French Renaissance building on W. 57th Street. The Smith + Gordon Gill-designed tower, to rise at 217 West 57th Street, has now cleared the final roadblock needed to move forward with construction.
Extell’s controversial plan to cantilever a 1,424-foot skyscraper at 217 West 57th Street over the Art Students League, which won city approval last fall, will be abandoned if the League’s members reject the deal at a vote tonight, according to the developer. Extell has promised to walk away from the deal, which would net the League $31.8 million, and move forward without the cantilever, if the League does not reach an agreement by Wednesday night.
Confidence among New York real estate brokers dipped in the third quarter thanks to political disarray in Washington and a relentless push toward super-luxury residential development that has dimmed the prospect of middle-class housing creation.
Masters of Real Estate
Vornado Realty Trust has acquired the land and air rights necessary to proceed with its development at 220 Central Park South, the real estate investment trust announced yesterday.
The $194 million acquisition will allow Vornado to begin construction of its planned 920-foot tall luxury residential condominium and puts to rest an ongoing dispute between the REIT and Extell Development, the seller of the rights.
Real estate kerfuffles
There’s “something major” happening in every submarket in the city, but will gridlock in Washington and the impending mayoral election thrust the city back into recession – or even into a backdrop of crime and bankruptcy reminiscent of the 1970’s?
Not a chance, said a group of the city’s top real estate developers at Observer Read More
One57′s crane continues to make life miserable for its neighbors. Just weeks away from the one-year anniversary of the crane’s dramatic Hurricane Sandy break and ominous, prolonged dangling, the crane once again had some issues, forcing 57th Street to shut down as construction workers scramble to fix the problem.
As the New York Fire Department succinctly described the situation on its Twitter feed: “same crane, different incident.”
With more than 52 million visitors to the Big Apple in 2012, one thing seems certain: By all accounts, the hospitality industry is thriving in New York City. Hundreds of new hotels, with nearly 20,000 rooms, have joined the inventory over the past few years. Despite this, according to some industry leaders, there is reason to feel uneasy about the outlook for continued growth in this asset class.
Seattle-based luxury retailer Nordstrom has reportedly paid $102.5 million for the site of its future Midtown flagship store at 225 West 57th Street.
The seven floor store will anchor a massive 88-story, 1,550-foot residential condo tower that Extell Development is building at the site.
The retailer said its store will encompass 285,000 square feet when it Read More
Neighbors of One57 are reportedly fuming around-the-clock after the Department of Buildings granted Extell Development a 24-hour work permit.
Residents are lashing out over a permit that allows Extell to run an exterior elevator and work on its crane through August 18, which is the latest of more than 300 such variances issued over the last year, Read More
Three months after reports that rental-focused Glenwood Management Corporation would foray into the condo market, the firm has filed plans with the city and state to erect a 19-story, 15-unit condo tower on the Upper East Side.
The Mortgage Observer reported back in April that Glenwood had purchased two adjacent properties at 58 and 60 Read More