The Real Deal New York

Extell buys more on West 57th Street

Drug-rehab center with 38K buildable sf is next door to CBS campus
By Mark Maurer | September 28, 2017 12:20PM

500 West 57th Street and Gary Barnett

Extell Development has extended its dominion on West 57th Street with the $19 million purchase of a drug rehabilitation center building that sits next to CBS’ massive campus.

Gary Barnett’s firm closed last week on the seven-story, 27,000-square-foot property at 500 West 57th Street that is entirely leased to substance-abuse treatment center ACI, according to the broker Christopher Snyder of CSRE.

The building has 38,000 buildable square feet, including 10,000 square feet of available retail space. Late last year, ACI’s lease expired and the clinic switched to a month-to-month lease, Snyder said.

The deal is not an apparent assemblage play, despite Extell’s reputation as the architect of complex multi-parcel acquisitions that have led to some of the largest luxury towers in the city. One57 and the under-construction Central Park Tower, alone, are located further east on 57th Street, at the heart of Billionaires’ Row. Extell has also occasionally made one-off acquisitions, such as the purchase of the Carnegie Deli site earlier this year.

“We do that; we own little buildings. Sometimes it’s worthwhile to trade them,” Barnett said in an interview in March.

CBS, which declined to comment, owns a 1 million-square-foot campus next door to the property, including a directly adjacent, vacant building at 504-506 West 57th Street that the broadcasting giant does not have plans to sell, sources said. (CBS is reportedly interviewing brokers to sell its 1 million-square-foot campus in Los Angeles.)

The property at 500 West 57th Street was built in 1913 for the Herman Knapp Memorial Eye Hospital. Charles Ekblom, a now-deceased landlord, bought it from Columbia University in the 1960s, and the building was placed in a family trust until the sale last week.

The trust has been trying to sell the building since 2014,  when the investment sales market was in better shape and when the property had the potential to command a high price.

When the building was asking $40 million in 2014, Barnett passed on making a bid to buy it, Snyder said. The deal went into contract for $44 million that year with another firm, but eventually fell apart, Snyder added.

Extell and Ekblom could not be reached for comment.

Aside from megaprojects One Manhattan Square – which topped out Thursday — and Central Park Tower, Extell is also piecing together several assemblages elsewhere in the city and selling others. The firm is selling a Bronx movie theater for $75 million and a NoMad assemblage.