WATCH: Gary Barnett on the residential market, Brooklyn and discounts at
One Manhattan Square

The prolific high-end condo developer says the market's "not terrible" and Extell's offering incentives "because we can"

Apr.April 22, 2019 07:00 AM

With leadership changes and and unheard of incentives, Gary Barnett has already had a headline-grabbing year.

Two weeks ago, Barnett’s Extell Development made waves offering buyers a 10-year break on common charges at One Manhattan Square if they buy before July 4. The 815-unit tower is one month into closings with prices ranging from $1.2 million for a one-bedroom to at least $3.5 million for a three-bedroom unit.

When asked why he did it, Barnett’s answer was simple: “Because we could,” he said, citing the old 421a tax exemption Extell secured before the popular tax abatement was altered in 2017. “I don’t think anybody else can.”

The move comes after Extell offered breaks on common charges for buyers across its portfolio, so long as the discounted unit went into contract before the end of 2018. And in January, the developer promised to roll out even more incentives at Central Park Tower, the city’s most expensive condo project ever with a projected sellout of $4 billion.

Extell’s spread of incentives come amid a tough buyer’s market where sales at new development projects were down 39.4 percent year over year in the first quarter of 2019, according to data from appraisal firm Miller Samuel. But Barnett sees it differently.

“The luxury market is not terrible,” he said in an interview with The Real Deal after the topping out of Brooklyn Point last week. “I think it’s just a question of getting people comfortable.”

At the topping off ceremony this week for Extell’s supertall Brooklyn tower, Barnett and the company’s new CEO, Sush Torgalkar, stood together in the hoist going up and down their 68-story tower joking about how cold they were in the suits they’d been instructed to wear. (In January, Torgalkar joined from Westbrook, and Barnett moved into a chairman role.)

The 720-foot tower is the tallest building in the borough and condos are priced from under $900,000 for a one-bedroom and up to $3 million or more for a three-bedroom. On the project’s website, Extell touts a 25-year tax abatement buyers will get that runs from roughly $10,600 to $28,500 in savings, depending on unit size. Closings are slated to begin in 2020.

“Price points are kind of affordable for New York,” Barnett said of his new 458-unit building.

After touring Brooklyn Point, Barnett warmed up with a coffee and answered questions about the residential market, Extell’s recent moves and how he feels about Brooklyn. Check out the video above to see his responses.

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