Extell Development sold the first 100 condo units at its Lower East Side tower One Manhattan Square for a combined $190 million, according to filings with the Tel Aviv Stock Exchange.
Sales at the tower — which has a projected sellout of $1.9 billion — officially launched in November, but Extell had reportedly been marketing the tower to Asian buyers for months prior. Gary Barnett’s firm is targeting mid-market buyers, with one-bedroom apartments priced around $1.2 million. It has quite a bit of competition in that segment of the market, where about 1,000 new listings in 2017 are expected to be priced between $1,800 and $2,400 per square foot, according to a report from Corcoran Sunshine.
To spur sales, Extell recently announced it would pay 50 percent of broker commissions upfront at its new development projects.
Extell’s senior vice president of development Raizy Haas told Bloomberg that the company is also raising prices. “It tells the market that we’re confident about our product and that we are selling well, selling fast,” she said.
The new pricing pushes the average price to roughly $2,360 a square foot, from $2,311 in December, Haas told Bloomberg.
Donna Olshan of Olshan Realty considers the project risky. “I’ve never seen anything that large, and in an area in Manhattan that would be considered remote,” she told Bloomberg. “This is a new location — an untested, unproven location — and they’re trying to build a community around it. It’s gutsy any way you slice it, no matter what the market is.”
One Manhattan Square is expected to cost around $1.4 billion. Extell is funding the project with $463 million in mezzanine financing from RXR Realty and a $500 million construction loan from a consortium of banks. [Bloomberg] — Konrad Putzier