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New York

Fetner sells stakes in rental buildings to Empire State Realty Trust

Developer also in contract to buy two properties on the Upper East Side

Hal Fetner is busy making deals.

The developer sold to Empire State Realty Trust the stakes he had retained in a pair of multifamily buildings that he sold to the REIT two years ago. He is also in contract to buy two properties on the Upper East Side.

“That the two properties are now sold gives us even greater flexibility to expand our footprint and make an impact on the city and its residents,” Fetner said in a statement to The Real Deal.

Fetner Properties in late 2021 struck a deal to sell ESRT — which is led by Tony Malkin — 90 percent stakes in the Victory, at 561 10th Avenue, and 345 East 94th Street. The two rental buildings had 625 units between them. Fetner at the time retained a 10 percent stake in the buildings, which were valued in that deal at $307 million.

In the meantime, he has been busy developing. He is putting up a pair of rental buildings in Long Island City: a 363-unit building with the Carlyle Group at 26-32 Jackson Avenue dubbed the Italic, and a 164-unit building at 27-01 Jackson Avenue named the Bold.

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Both projects will qualify for the expired 421a tax break if they are completed by the June 2026 deadline.

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Fetner is also building a 23-story, 171-unit rental property at 266 West 96th Street on the Upper West Side. Fetner said the proceeds from the sale to ESRT will be redeployed at his other projects.

The developer was among many who pre-qualified projects for 421a by getting foundations in the ground before the abatement program lapsed in June 2022. Permits to lay foundations for multifamily buildings have since plunged, largely because most rental projects do not pencil out if they have to pay regular property tax rates.

State lawmakers are discussing how to replace the tax break. Any new version would be included in a broader package of housing legislation.

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Empire State Realty TrustFetner PropertiesHal Fetner