As Gary Barnett focuses on two New York City luxury megaprojects, his firm Extell Development is quietly looking to sell one of several smaller assemblages. This time, it’s a site with 135,000 buildable square feet at the border of Murray Hill and Kips Bay, sources told The Real Deal.
Just last summer, Extell had a plan in motion for the site, located at the southeast corner of East 34th Street and Third Avenue. The developer had filed a permit application in June 2016 for a 13-story mixed-use property, but the city’s Department of Buildings has not yet approved those plans.
Barnett hasn’t hired a broker and doesn’t have an asking price, but sources familiar with the property said it could sell for $500 or $550 per buildable square foot, or in the $67.5 million-to-$75 million range. A representative for Extell declined to comment.
Extell started putting the assemblage together in late 2015 when the company paid $16.5 million to buy two corner properties – 501 and 499 Third Avenue – from the Duell family. Barnett at the time was buying a handful of properties from the Duells in the Flatiron District, Greenwich Village and Chelsea, ultimately spending about $100 million buying real estate from the family.
He then picked up the next property down the avenue paying $11.25 million in early 2016 to buy 497 Third Avenue from longtime owner Cyril Clancy. He turned around and sold the five-story building to the Wasserman family later that year for $7.2 million, but not before creating a zoning-lot agreement that allowed him to transfer more than 12,000 square feet of unused air rights from the property to his development site.
Extell’s plans call for a nearly 58,000-square-foot mixed-use property with 32 apartments. It’s likely that Barnett has additional air rights in the form of inclusionary housing certificates that he’s including with the assemblage to boost the total buildable square footage.
On the day Extell filed the plans, the owners of the New York Budget Inn at 501 Third Avenue filed a lawsuit asking a judge if Extell could terminate the lease without filing demolition plans first. The owners discontinued the case with prejudice in June.
Will Parker contributed reporting.