The Real Deal New York

Extell expands Diamond District footprint with $74M office deal

Developer rumored to be planning Midtown hotel

August 19, 2015 11:30AM
By Rey Mashayekhi

Gary Barnett and 10 West 47th Street in Midtown

Gary Barnett and 10 West 47th Street in Midtown

Don’t expect the rumors that Gary Barnett’s Extell Development is planning a Midtown hotel to die down anytime soon. The firm just acquired a 14-story Diamond District office building at 10 West 47th Street for $74.4 million, located next to a building Extell picked up for $56 million last year.

Extell closed on 10 West 47th Street, a 72,000-square-foot building between Fifth and Sixth avenues, on August 4, according to property records filed with the city Wednesday. The seller is Arthur Margolin’s Kenart Realties, which owned the property since 1980.

The office building, which features 6,000 square feet of retail space, is located next door to the National Jewelry Exchange Building at 2 West 47th Street – which Extell picked up for $56.5 million from ABS Partners last year. That acquisition gives rise to rumors that Extell is planning a hotel on West 47th Street, with around 100 tenants reportedly departing 2 West 47th Street in wake of the deal.

Together, 2 West 47th Street and 10 West 47th Street have a combined 206,500 buildable square feet.

While declining to divulge the purchase price, Margolin confirmed the deal — noting that in addition to 2 West 47th Street, Extell also owns several other adjacent properties surrounding 10 West 47th Street.

“From what I gather, [Extell is] putting together an assemblage,” Margolin said. “He has the buildings next door, the buildings behind me.”

“He’s not consulting with me, but I think it’s safe to say from experience that whatever [Barnett] does, it’s probably going to be a mixed-use project,” Margolin added.

Representatives for Extell could not be reached for comment.

Extell went into a $100 million contract for a Gristedes supermarket site, part of an assemblage on the Upper East Side that could see a 20-story tower with more than 200 condo units.

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