RXR will finance three Extell projects in exchange for equity, 50% of cash flow

The developers will partner on 252 South Street, 500 East 14th Street and 547 10th Avenue

TRD New York /
Mar.March 15, 2016 11:05 AM

UPDATED: March 15, 4:50 p.m.: Gary Barnett will get by with a little help from his friends at RXR Realty, for a price.

Scott Rechler’s firm is set to offer $463 million in financing for three of Extell Development’s Manhattan projects, the condominium building at 252 South Street, and two projects at 500 East 14th Street and 547 10th Avenue.

In exchange, RXR will receive a preferred equity stake in the three projects, which entitles it to half their cashflow after the loan is paid back and Extell recoups its equity, Bloomberg reported, citing a Tel Aviv Stock Exchange filing written in Hebrew.

Rechler – who told The Real Deal last month that his firm was looking to lend more than $500 million for constructions projects – told the news service that he settled on the three properties in question because of their low basis, and consequent high profit margins.

“We recognized there was a lot of development potential out there, and there were developers like Gary who had accumulated land early in the cycle,” Rechler told Bloomberg. “He is probably one of the best land assemblers out there, and needed more capital to get all this into service.”

At 252 South Street in the Lower East Side, Extell is planning an 80-story, 940,000-square-foot luxury condo tower, set to hold 815 units, along with retail space at the base. Apartments there will list at between $1 million and $3 million, a market segment that remains robust in the face of sagging demand at the high end. Barnett has marketed the tower toward Asian investors.

Extell is also constructing a two-building low-rise rental complex on East 14th Street in the East Village, totaling 106-unit and 241,000 square feet. The planned 244,000-square foot rental building at 547 10th Avenue is slated to have 598 units.

Barnett visited Israel last week to reassure investors that all was well with his projects. [Bloomberg] Ariel Stulberg

Correction: A previous version of this article used an outdated story and unit count for 252 South Street


Related Articles

arrow_forward_ios
One Manhattan Square Extell Development CEO Gary Barnett (Credit: Curbed NY)

Extell lands $690M refinancing package for One Manhattan Square

Extell lands $690M refinancing package for One Manhattan Square
237 Park Avenue and Scott Rechler (Photos via Getty; RXR)

What tenants are paying at RXR and Walton Street Capital’s 237 Park Avenue

What tenants are paying at RXR and Walton Street Capital’s 237 Park Avenue
217 West 57th Street with Extell Developement's Gary Barnett and Corcoran's Pamela Liebman (Photos via Extell; Barnett via Anuja Shakya)

Extell brings on Corcoran Sunshine to help market Central Park Tower

Extell brings on Corcoran Sunshine to help market Central Park Tower
Lanhee Yung and Sush Torgalkar (Photos via Cornell; Getty)

Extell, Starwood alums seek $500M for “contrarian” investing

Extell, Starwood alums seek $500M for “contrarian” investing
Extell's Gary Barnett and a rendering of 50 West 66th Street (Courtesy of Snøhetta)

Judge throws cold water on Extell’s UWS condo development

Judge throws cold water on Extell’s UWS condo development
Tel Aviv Stock Exchange bull (Wikimedia Commons)

NYC developers face downgrades on Israeli bond market

NYC developers face downgrades on Israeli bond market
Claude Wasserstein and 995 Fifth Avenue (Getty, Google Maps, Sotheby's)

Claude Wasserstein relists UES penthouse for $55M

Claude Wasserstein relists UES penthouse for $55M
Gary Barnett and Sush Torgalkar with 225 West 57th Street, 225 West 86th Street, and 169 Columbia Heights in Brooklyn (Credit: Getty Images, iStock, and CityRealty)

Torgalkar out as CEO of Extell: sources

Torgalkar out as CEO of Extell: sources
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...