Gary Barnett’s L-shaped project scored a “W” this week thanks to a $125 million debt package that refinances the planned Upper East Side tower.
German commercial lender Helaba provided the loan for Extell Development’s project at 1637 First Avenue, according to property records reported by the Commercial Observer. Helaba previously demonstrated its belief in the project in 2018, when it provided $118.2 million in financing to back the purchase of the 10 lots, along with development rights.
The loan is a victory at the site of plenty of unexpected losses. There have been two tenants holding out at the site, forcing Extell to try building around them.
Extell filed plans in November for a 22-story building at the First Avenue site between East 85th and East 86th streets. The building will stand 215 feet tall and include 543 apartments, along with commercial space.
The developer paid more than $77 million to develop the assemblage, plus nearly $5 million for an easement and air rights. Holdouts in two buildings have made piecing together the site a challenge, though.
The notorious Podolsky brothers were the first known holdouts, refusing to move from a mid-block building at 1645 First Avenue. Barnett told The Real Deal he made the multifamily landlords generous offers to leave, but they refused.
A rent-stabilized tenant in one of the buildings also seems poised to stay put.
Extell tasked SLCE Architects to design a building around them, which may have the effect of driving the tenants out anyway, considering the unpleasantness of living next to noisy construction projects.
Elsewhere on the Upper East Side, Extell has started work on its project on a vacant lot between East 79th and East 80th streets on First Avenue. The 30-story, 400,000-square-foot building being developed there is already pre-leased in part to the Hospital for Special Surgery. Extell is reportedly aiming to lease the upper floors to other medical tenants.
[CO] — Holden Walter-Warner