Extell pays $11.3M for retail in Midtown West, already controlled thru long-term lease

Extell Development through the entity Extell 171 West 57th Street LLC paid $11.3 million to Forrell & Thomas through the entity Forrell & Thomas L.P. for the retail condo at 171 West 57th Street in Midtown West, Manhattan. Extell already controlled the property through a long-term lease that ran to 2047.

Extell financed the purchase with a loan from Pacific National Bank valued at $14.7 million. The prior lenders were M&T Bank and Capital One which held debt that had an combined original loan amount of $11.2 million.

The sale and financing closed on July 24, 2023 and was recorded on August 2, 2023. The property has 9,975 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,137 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 seller bought the property on July 11, 2006, for $10.2 million. The signatory for Forrell & Thomas was Bess Steiger. The signatory for Extell Development was Marc Kwestel. The contract date was June 14, 2023.
Forrell & Thomas is a music label.
In this transaction, Extell is buying back the commercial condo unit in the Briarcliff Condominium that Ziel Feldman developed into condos in 1999. Barnett bought the commercial unit in 2001 for $6.65 million, then sold it in 2006 to Forrell & Thomas for $10.2 million but at the same time Extell leased it back from Forrell & Thomas through a 49-year ground lease with a valuation of $5 million.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Extell Development purchased 34 properties in seven transactions for a total of $1.2 billion and sold 44 properties in 42 transactions for a total of $951.1 million over the past 24 months.
The seller Forrell & Thomas had not purchased any other properties and had not sold any properties over the same time period.

The property

The retail condo in Midtown West has 9,975 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 9,975 square feet. The city-designated market value for the property in 2022 is $12.5 million. The most recent loan totaled $6 million and was provided by M&T Bank on January 8, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Midtown West, The majority, or 75 percent of the 75.9 million square feet of commercial built space are office buildings, with hotel buildings next occupying 14 percent of the space. In sales, Midtown West has the 3rd highest sale turnover among other neighborhoods in the city with $2.7 billion in sales volume in the last two years. For development, Midtown West is the most active neighborhood among other neighborhoods. It had 17.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 24 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 13 commercial properties representing 302,527 square feet of the 608,474 square feet. The largest owner is S.W. Management, followed by Namdar Realty Group and then Andrew Moses.
On the tax block, there were two new building construction projects totaling 1,555,607 square feet. The largest is a 1,502,992 square-foot business (B) building submitted by Alchemy Properties and filed by Kenneth Horn with plans filed November 13, 2019 and permitted September 14, 2022. The second largest is a 41-unit, 52,615 square-foot residential (R-2) building submitted by Extell Development and filed by Michael Loeb with plans filed November 12, 2015 and it has not been permitted yet.

The majority, or 54 percent of the 608,474 square feet of built space are hotel buildings, with office buildings next occupying 18 percent of the space.

The buyer

The PincusCo database currently indicates that Extell Development owned at least 66 commercial properties with 793 residential units in New York City with 2,882,560 square feet and a city-determined market value of $767.8 million. (Market value is typically about 50% of actual value.) The portfolio has $5.5 billion in debt, with top three lenders as Guggenheim Partners, Blackstone Group, and Prudential Credit Opportunities respectively. Within the portfolio, the bulk, or 37 percent of the 2,882,560 square feet of built space are specialty properties, with elevator properties next occupying 28 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.

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