The Real Deal New York

Extell snags building next to UES dev site

Developer is using air rights from 1637 First for planned condo building
By E.B. Solomont | April 11, 2018 03:15PM

Gary Barnett and 1637 First Avenue (Credit: Google Maps)

Extell Development just scooped up another low-rise apartment building in Yorkville, across the street from its 20-story condominium project.

The Gary Barnett-led firm shelled out $16 million for 1637 First Avenue, a four-story, 16-unit building, records show. The seller was the Hakim Organization, which had owned the property since 1998.

The low-rise property is one of five adjacent apartment buildings on the north side of 86th Street that Extell has collected, with plans to transfer the air rights to its development at 350 East 86th Street, a project anchored by a former Gristede’s supermarket. Extell purchased the supermarket site for $92 million in 2016.

After collecting five buildings across the street, Extell is currently offering those properties as a development site that could fetch up to $120 million, or $700 per buildable foot, according to Real Estate Alert. The site, at 351 East 86th, could hold a 172,000-square-foot residential building.

By closing on 1637 First, Extell was also able to increase the size of its loan for the 86th Street condo project to $106 million, records show.

Last year, the developer secured an $85.3 million loan from Bank of the Ozarks. The financing replaced acquisition debt from Manufacturers and Traders Trust Company, and included the possibility of increasing the loan amount by up to $106 million.

Extell’s 86th Street project is just north of another assemblage that the developer has been piecing together for the past decade. Barnett is in the final stages of assembling that site, on First Avenue between East 79th and 80th streets, as The Real Deal reported. The assemblage consists of more than 10 parcels and will have more than 250,000 buildable square feet.