Extell in contract to sell 543-unit Harlem dev site for about $70M: TASE records

Gary Barnett’s Extell Development signed a contract in July to sell the development site with an address of 180 East 125th Street, also known as 2288 Third Avenue, for approximately $70 million, according to a recent filing with the Tel Aviv Stock Exchange. The filing did not identify the buyer or a buyer LLC.

TASE pdf document with contract information

A potential purchaser is Jacob Schwimmer, who created a company called 180 E125th Realty LLC on June 24, 2024. He did not respond to a request for comment. The deadline to complete the sale transaction is September 23, 2024 however the buyer has an option to extend it until November 7 2024.

The transaction would bring in a net revenue of $64 million to Extell, the TASE report said.

In 2023, Extell’s entity 125th Street Lessee LLC, obtained a bonus to a planned 543-unit residential project on the site, which would allow a developer to add an additional floor to the building in exchange for including a 6,194 grocery store. In 2022, PincusCo reported on the application for the bonus. In April 2023, the Metropolitan Transportation Authority paid Extell $82 million for a development site on the western portion of the tax block, fronting Lexington Avenue, with an address of 160 East 125th Street. That property is lot 20.
The ULURP filing says, the “proposed development is a new mixed-use building at 160 feet in height and up to 15 stories containing residential and commercial/retail uses with a total of up to 412,223 square feet of floor area or a floor area ratio (“FAR”) of 5.23.”

“The Proposed Development would occur on lot 27 (“Development Site”) which occupies approximately 42,540 square feet of the Zoning Lot. The Applicant for the project is the ground Lessee of Lot 27, and is a separate entity from the owner of Zoning Lot, 160 East 125th Owner LLC (the “Owner”). The MTA is in the process of acquiring fee title to Lot 20 in order to construct, as a part of Phase II of the Second Avenue Subway, a major subway terminal and intermodal transfer facility at 125th Street and Lexington Avenue. Lot 20 would be developed in the future in coordination with the MTA’s plans for the subway terminal at 125th Street.”

The property

The parcel has frontage of 240 feet and is 201 feet deep with a total lot size of 42,539 square feet. The zoning is C4-4D which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 6.02 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $3.5 million.

Development

Extell Development submitted a new building construction project for a 354,350 square-foot business (B) building at 180 East 125th Street. The plan was filed on April 8, 2020. It calls for the construction of a 120-foot tall, nine-story building and was filed with the New York City Department of Buildings under job number 121207504.

On this lot, Anthony Mannarino, on behalf of Extell Development filed a land use application for a 543-unit mixed-use building at East 125 Street. The application, filed on September 21, 2022 through the entity 160 East 125th Owner LLC, is described as: Extell previously disclosed plans to build an office building, HHQ, on the parcel with the address 180 East 125th Street. An application by 125th St Lessee LLC for a CPC certification of a FRESH food store and a CPC authorization to modify maximum building height. The actions would reallocate 6,194 sqft. of eligible FRESH floor area as additional residential area, extending the max permitted height from 145 ft to 160 ft, and adding one additional story. Approval of the actions would facilitate the development of a 15-story building with approximately 543 housing units in East Harlem, Manhattan Community District 11

Violations and lawsuits

According to city public data, the property has received $405 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

The neighborhood

In East Harlem, The majority, or 51 percent of the 52.4 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 21 percent of the space. In sales, East Harlem has near average sales volume among other neighborhoods with $356.2 million in sales volume in the last two years and is the 23rd highest in Manhattan. For development, East Harlem has near average amount of major developments among other neighborhoods and is the 25th highest in Manhattan. It had 1.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 10 of the 16 commercial properties representing 32,187 square feet of the 219,877 square feet. The largest owner is Alex Adjmi, followed by Durst Organization and then Extell Development. On the tax block, there were three new building construction projects totaling 364,904 square feet. The largest is a 354,350 square-foot business (B) building submitted by Extell Development and filed by David Rothstein with plans filed April 8, 2020 and permitted January 14, 2022. The second largest is a 6,050 square-foot mercantile (M) building submitted by Albert Sanfilippo with plans filed December 6, 2018 and it has not been permitted yet.

The owner

The PincusCo database currently indicates that Extell Development owned at least 64 commercial properties with 651 residential units in New York City with 2,577,734 square feet and a city-determined market value of $661.9 million. (Market value is typically about 50% of actual value.) The portfolio has $6.9 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and JVP Management respectively. Within the portfolio, the bulk, or 42 percent of the 2,577,734 square feet of built space are specialty properties, with elevator properties next occupying 22 percent of the space. The bulk, or 96 percent of the built space, is in Manhattan, with Brooklyn next at 4 percent of the space.

The surrounding

Within a 400-foot radius of 2298 3 Avenue, PincusCo identified one commercial real estate item of interests occurred over the past 24 months. It was a sale which Metropolitan Transportation Authority bought the 0-square-foot development site (V1) on EAST 125th Street for $82 million from Extell Development on May 3, 2023.

Direct link to the property’s ACRIS page and link to DOB NOW portal.