The Real Deal New York

Apollo lends Extell $65M for East Harlem project

Gary Barnett's firm filed plans to demolish a Pathmark supermarket last month
By E.B. Solomont | December 08, 2016 12:32PM

Gary Barnett and 149 East 124th Street

Gary Barnett and 149 East 124th Street

UPDATED, 4:43 p.m., Dec. 8: Extell Development chief Gary Barnett has locked down $65 million in financing from Apollo Global Management for a still-undisclosed development project in East Harlem.

The loan consolidates an earlier $35 million loan from Signature Bank with an additional $30 million from Apollo Commercial Real Estate Finance, a subsidiary of Apollo Global Management, according to loan agreement documents.

The block-long development site — which previously housed a Pathmark supermarket — is bounded by Third and Lexington avenues and East 124th and 125th streets.

Barnett TRData LogoTINY shelled out $70 million for the land, including $39 million for the property at 149 East 124th Street from the church-based Abyssinian Development Corp.; $21 million to buy out the supermarket’s lease; and $10 million for a former U.S. Post Office on the block.

Extell’s plans for the site are still unclear, although Barnett’s firm filed plans to demolish the supermarket this fall, two years after assembling the site.

In October, the city unveiled plans to rezone a large swatch of East Harlem. Land-use experts believe Extell could build up to 613,605 square feet of residential, if it includes affordable housing units or community space. The site is also zoned for commercial use.

Extell has been on a financing tear. He secured more than $1 billion in funding since August for two ambitious projects, One Manhattan Square on the Lower East Side, and Central Park Tower on Billionaires’ Row. Scott Rechler’s RXR Realty provided a $300 million mezzanine loan for One Manhattan Square, where Extell locked down $500 million in construction financing from a group led by Deutsche Bank and Natixis. He is getting $300 million in equity from SMI USA for Central Park Tower.

This fall, the Abyssinian organization paid the city $11 million after a legal battle of the sale of the Pathmark site. Although the Abyssinian organization sold the site in 2014, it wasn’t only theirs to sell. The city owned 49 percent.

Correction: A previous version of this article misidentified the source of the $30 million financing. It is Apollo Commercial Real Estate Finance.