As quickly as $1 beers are swallowed at the Phoenix, Gary Barnett’s Extell Development has pulled out of the East Village.
The development giant, which purchased 17 buildings in the East Village last year, has quietly sold them all to the elite real-estate fund Westbrook Partners for $97.5 million—a hefty increase from the $72 million that Extell paid just 18 months ago. The sales were recorded in city records.
The buildings are all small residential ones that include a total of 259 apartment units, according to Propertyshark.com.
When Extell purchased the East Village portfolio, it was a curious move: The development giant is in the business of high-end development, not collecting rent checks in old five-story walk-ups.
Whatever its plans, it appears to have abandoned them.
“It was a great opportunity to sell,” said George Arzt, a spokesman for Extell. When asked why the company bought the properties in the first place, he said it was a “good opportunity to pick up some properties we wanted.”
Mr. Arzt wouldn’t comment on whether Extell planned to flip the properties all along, or whether bigger plans for a major development were scrapped.
In any event, wherever Mr. Barnett’s company goes, it seems to carry controversy with it. One of its biggest developments, the Ariel East and West on 100th Street and Broadway, has touched off rezoning efforts on the Upper West Side, with residents complaining that the high-rise condos are out of place in the neighborhood.
In the East Village, the community board organized a meeting soon after Extell’s buy became public, because of “concerns about funny demolitions or evictions,” said Susan Stetzer, the district manager of Community Board 3.
Ms. Stetzer said that Extell officials didn’t share any plans about potential developments and assured tenants there would be no demolitions. Since then, she said, she’s heard nothing from Extell or from tenants.
But before tenants gather round in Tompkins Square Park to offer a sigh of relief: Westbrook Partners, the new buyer, is in many ways a carbon copy of Extell.
Westbrook trades primarily in commercial real estate, trading $100 million buildings in Europe, and was part of the team that sold 450 Lexington Avenue to Istithmar for $600 million last year. It was also reportedly one of the leading bidders for Stuyvesant Town and Peter Cooper Village.
If Westbrook principals are still sad that they lost out on Stuy Town, consider this the leg-up portfolio! The apartments in the Village stretch from Second Street to 13th Street, between Second Avenue and Avenue B. Nine of the 17 buildings are either on or just off Avenue A between 10th and 13th streets.
The biggest residential building, 211 Avenue A, has 35 units, including two commercial units, the bars the Phoenix and Boys Room. The building sold for $10.2 million.
Representatives from Westbrook did not return calls for comment.
But one wonders: The prices of the apartments didn’t diminish, so perhaps Westbrook will finish whatever plan Extell might have had. And perhaps Westbrook has the bigger stomach to deal with some of the accompanying problems of a wide development.
Media Firm Scarfs Big Downtown Chunk
Good news for American Banker! You’re staying at home.
SourceMedia, the company that owns the financial publications American Banker, National Mortgage News, The Bond Buyer and Accounting Today, has expanded its downtown presence to 122,000 square feet.
The media company signed a renewal for the 79,296 square feet it occupies on floors 25 through 27 at the 35-story 1 State Street Plaza. One block north, SourceMedia signed a new lease for the entire seventh floor at 1 Whitehall Street, totaling 21,657 square feet. It will also renew its 20,803 square feet of space on the ninth floor.
This lease will represent one of the biggest lease and renewals for the financial district this quarter. Activity downtown has been surging, with rents there increasing more than in any other market in the United States over the last year, according to a report by CB Richard Ellis. During that time, rents increased 43 percent.
Gus Field and Adam Rappaport of Cushman & Wakefield represented SourceMedia, while Tom Keating represented Rudin Management at 1 Whitehall, and Eli Levitin represented the Wolfson Group at 1 State.
Busy Holliday Cuts Deal for Graybar Building Control
Clever Marc Holliday is doing everything to keep his shareholders happy.
After a busy first quarter, SL Green has swung a deal that could keep it in control of the ground lease of the Graybar Building at 420 Lexington Avenue through 2080.
SL Green reached an agreement with Landgray, the fee owner, and MetLife, the lessee, for an early renewal and extension of its ground lease through 2029.
Mr. Holliday, SL Green’s C.E.O., will owe Landgray $11.2 million a year under the agreement.
The deal also gives SL Green the right to enter into a new ground lease once the current one expires in 22 years. If SL Green picks up that option, the new lease will have a term of 21 years, with two 15-year renewal options, which means the 420 Lexington Avenue address could be under SL Green’s portfolio for the better balance of the century.