Extell Development’s barnstorming tour of the Upper East Side is rolling along, most recently landing financing for its incoming medical tower on First Avenue.
Gary Barnett’s firm scored a $425 million construction loan for the project at 1520 First Avenue, the Commercial Observer reported. The loan is for three years and includes two one-year extension options.
Pacific Western Bank provided the senior loan. Rexmark, Harbor Group International and InterVest Capital Partners — formerly known as Wafra Capital Partners — were in mezzanine positions.
Extell’s plans for the site emerged last year. Barnett’s firm broke ground on a 30-story, 400,000-square-foot building on a vacant lot between 79th and 80th streets.
Roughly half the building is pre-leased after the Hospital for Special Surgery nabbed 196,000 square feet across the first eight floors for physicians’ offices and other services. Extell aims to lease the higher floors to other medical tenants.
Barnett estimated the project would cost approximately $500 million.
Extell spent years piecing together the site, nearing a 250,000-square-foot assemblage in March 2018. Months later, the Church of Santa Monica agreed to sell more than 100,000 square feet of development rights to Barnett at 406 East 80th Street for $35.8 million.
Read more
Development
New York
Extell building 30-story medical tower on UES
Development
New York
Checkmate for Papaya King: Extell files demo plans on UES
Development
New York
Barnett victory may set precedent for landlords battling holdouts
Barnett has been keeping busy on the Upper East Side in recent months.
Extell filed demolition plans for 171-179 East 86th Street in June, but kept details of the site’s future close to the vest. The site is home to the flagship Papaya King hot dog eatery, which was still serving food with relish as of last week.
Barnett also recently scored a big win against a holdout blocking his planned 22-story tower at 1637 First Avenue. In September, a court ruled that Extell did not have to renew the rent-stabilized lease of a tenant at a six-story walk-up on the site, greenlighting demolition plans for the building and potentially setting a precedent for future holdout battles.
The developer is still resigned to a workaround at the site, and last year filed plans that would snake around both the tenant’s building and a mid-block property owned by the Podolsky brothers, who have refused offers from the developer. Barnett said he was done negotiating with the Podolsky brothers, but it wasn’t immediately clear how the recent victory would affect Extell’s plans.
— Holden Walter-Warner