How Extell got into Brooklyn (and why it’s not rushing to do more)

Gary Barnett talks City Point, market slowdown

New York /
Apr.April 10, 2018 03:55 PM

Gary Barnett

Before he purchased the City Point site for $120 million, Extell Development’s Gary Barnett wasn’t eager to venture into the outer boroughs.

“I never was interested in developing in Brooklyn or Queens, and shame on me. I totally missed the market,” he said Tuesday during the eighth annual Brooklyn Real Estate Summit at City Point. “People saw the opportunities earlier and did great things here.”

Barnett said he and Paul Travis, founder of Washington Square Partners, began discussing the site 138 Willoughby Street back in 2013. He noted that the 25-year tax break on the property was “critical” to the deal. He said the Bloomberg administration approved the subsidy program to encourage development in what was once considered a “blighted” area of Brooklyn.

Extell’s 68-story tower will be the third built as part of the 1.8-million-square-foot, mixed-use City Point project. The condo building will feature 458 units and has a projected sellout of $901 million.

Barnett said that Extell had looked at 11 Hoyt Street, a site Tishman Speyer bought in 2015 for $170 million and is now developing a 480-unit condo building. He said Extell also competed for the mixed-use development at Pier 1 at Brooklyn Bridge Park, which ultimately went to Starwood Capital Group and Toll Brothers.

When asked by Regina Myer, president of the Downtown Brooklyn Partnership, whether Extell is eyeing any other sites in Brooklyn, Barnett said the company is being cautious about what new projects it pursues. He noted that construction costs are continuing to rise, while a revenue yield is declining. For its part, Extell has a few projects keeping it busy, like its $4 billion Central Park Tower. While he doesn’t think the market is headed for a “major cataclysm,” developers are likely going to have to wait for existing and pending residential supply to be absorbed, he said.

“It’s hard to make the numbers work. There is a tremendous supply of product coming to market,” he said. “I think it’s a time to be careful. Let the market digest.”


Related Articles

arrow_forward_ios
One Manhattan Square Extell Development CEO Gary Barnett (Credit: Curbed NY)

Extell lands $690M refinancing package for One Manhattan Square

Extell lands $690M refinancing package for One Manhattan Square
Extell Development's Gary Barnett (Credit: Getty Images and iStock)

Chelsea residents paid Gary Barnett $11M to protect their views from a planned tower

Chelsea residents paid Gary Barnett $11M to protect their views from a planned tower
Central Park Tower

Extell just went public with Central Park Tower listings

Extell just went public with Central Park Tower listings
176 North 6th Street and 16 South Portland Avenue in Brooklyn (StreetEasy; Google Maps)

Brooklyn luxury market surges with nearly $73M in contracts

Brooklyn luxury market surges with nearly $73M in contracts
Extell Development's Gary Barnett and 32 West 48th Street (Google Maps)

Extell makes its Diamond District hotel official

Extell makes its Diamond District hotel official
A rendering of Gowanus Green and HPD commissioner Louise Carroll (Rendering via Jonathan Rose Companies)

Massive Gowanus development will be 100% affordable

Massive Gowanus development will be 100% affordable
17 Polhemus Place and 7A 2nd Place in Brooklyn (Photos via StreetEasy; Google Maps)

Park Slope townhouse sells after just 36 days on the market

Park Slope townhouse sells after just 36 days on the market
Silvercup Studios (Getty)

Outer-borough loan activity fired up in October

Outer-borough loan activity fired up in October
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...