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New York

Extell in contract to buy LES site for $175M

With 1 million square feet of development allowed, a high-rise rental is likely

Gary Barnett‘s Extell Development is in contract to purchase a former Pathmark supermarket on the Lower East Side  — as The Real Deal first reported — for about $175 million, Crain’s confirmed today. The plot, at 227 Cherry Street, between Rutgers Street and Pike Slip, is zoned to allow a nearly 1 million-square-foot development, Crain’s said. The building will in all likelihood become a high-rise rental tower with both market rate and affordable apartments, according to Crain’s.

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The Lower East Side is seeing rising rents and, as a result, developers are eager to get projects there in the ground, James Nelson, an investment sales broker at Massey Knakal Realty Services, told Crain’s.

“A lot of renters have been pushed to the Lower East Side in search of value as rents have risen in areas like the West Village and Tribeca,” Nelson said. “Bruce Ratner’s 8 Spruce Street is only about 10 blocks south of there and he was able to get $80 per square foot rents, which was a rate that no one thought could be achieved there just a few years ago.” [Crain’s] –Guelda Voien

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Extell DevelopmentGary Barnett