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Correction: A previous version of this article used an outdated story and unit count for 252 South Street.