Extell pays $39.9M to Metropolitan Club for 135K sf in air rights in Lenox Hill

Extell Development through the entity 655 Madison LLC paid $39.9 million o the Metropolitan Club, to transfer 135,146 square feet of air rights from 1 East 60th Street to Extell’s development site at 655 Madison Avenue, in Lenox Hill, Manhattan. The expected use is ground up development.
The deal closed on January 29, 2026 and was recorded on February 2, 2026. The sale price per transfer development right square foot is approximately $295 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatories for Metropolitan Club and an affilate were Robert J. Strang and Edgar H. Haug. The signatory for Extell Development was Gary Barnett .

Prior sales, articles and revenue

Prior to this transaction, PincusCo has records that the buyer Extell Development purchased 17 properties in six transactions for a total of $534.1 million and sold 12 properties in six transactions for a total of $237 million over the past 24 months.
The seller Metropolitan Club had not purchased any other properties and had not sold any properties over the same time period.
Commercial Observer reported on December 16, 2025 that Extell Development borrowed $1.1 billion from Tyko Capital for 655 Madison Avenue, Manhattan, NY.

The Real Deal reported on December 17, 2025 that Extell Development borrowed $1.1 billion from Tyko Capital for 655 Madison Avenue, Manhattan, NY.

The property

The office building in Lenox Hill has 331,806 square feet of built space and 241,253 square feet of additional air rights for a total buildable of 484,130 square feet according to a PincusCo analysis of city data. The parcel has frontage of 100 feet and is 109 feet deep with a total lot size of 10,946 square feet. The zoning is C5-3 which allows for up to 15 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $118.8 million.

Violations and lawsuits

The properties were involved in one lawsuit and zero bankruptcies over the past two years. The suit was a $390,266 money judgment concerning a retail lease filed on March 26, 2025, by Extell Development against Abraham Merchant and Merchants Hospitality. In addition, according to city public data, the properties have received one DOB violation, $15,000 in ECB penalties, and $20,290 in OATH penalties in the last year.

Development

For the tax lot buildings, three out of the six buildings received a initial certificate of occupancy in the last ten years. On these lots, there is one active new building construction project, M01139026, for a 62-unit, 161,208 square-foot 70 building. The project was submitted by Extell Development and filed by David Rothstein with plans filed November 18, 2024 and it has not been permitted yet.

The neighborhood

In Lenox Hill, The bulk, or 34 percent of the 53.3 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 30 percent of the space. In sales, Lenox Hill has the 2nd highest sale turnover among other neighborhoods in the city with $4.5 billion in sales volume in the last two years. For development, Lenox Hill has near average amount of major developments among other neighborhoods and is the 22nd highest in Manhattan. It had 1.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On the tax block of 653 Madison Avenue, PincusCo has identified the owners of nine of the 11 commercial properties representing 1,145,832 square feet of the 1,251,557 square feet. The largest owner is Hartz Mountain Industries, followed by Extell Development.
On the tax block, there was one new building construction project filed totaling 161,208 square feet. It is a 62-unit, 161,208 square-foot 70 building submitted by Extell Development and filed by David Rothstein with plans filed November 18, 2024 and it has not been permitted yet.

The majority, or 49 percent of the 1.3 million square feet of built space are hotel buildings, with office buildings next occupying 48 percent of the space.

The buyer

The PincusCo database currently indicates that Extell Development owned at least 67 commercial properties with 751 residential units in New York City with 2,851,498 square feet and a city-determined market value of $827.4 million. (Market value is typically about 50% of actual value.) The portfolio has $7.7 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and JVP Management respectively. Within the portfolio, the bulk, or 38 percent of the 2,851,498 square feet of built space are specialty properties, with elevator properties next occupying 22 percent of the space. They are all located in Manhattan.

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