Extell Development sells discounted rental shares in Manhattan


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Extell President Gary Barnett, 510 East 14th Street and RXR Realty CEO Scott Rechler (Getty, EVGB)

Extell President Gary Barnett, 510 East 14th Street and RXR Realty CEO Scott Rechler (Getty, EVGB)

Extell is selling a stake in two properties in Manhattan because it is struggling with a stagnant luxury residential market.

The developer, led by Gary Barnett, will sell 42 percent of RXR Realty’s rental apartment portfolio, the Financial Times said.

The transaction involves 750 units in two buildings in Manhattan: 555TEN at 555 10th Avenue in Hell’s Kitchen and EVGB at 510 East 14th Street in East Village.

555 10th Avenue (Extell)

555 10th Avenue (Extell)

For RXR Realty, the transaction is a contract. It values ​​the portfolio at approximately $ 800 million, while the pre-pandemic valuation has fixed rents at $ 1 billion.

The housing market was even slow before Covid delayed construction and almost ruled out international travel, effectively closing a significant group of buyers. This is bad news for Extell, which has developed a number of billionaire’s Central Park Tower and One57. Sales were reportedly slow at the first and last recently recorded sale of an apartment with a loss of 51 percent.

Extell sought to raise money from hedge funds and issued Israeli bonds. In June 2020, the Israeli rating agency Midroog reduced Extell bonds by one level with a negative outlook, due to the expected further decline in apartment sales.

In an interview with the Financial Times in late 2020, Barnett said that “it was very frustrating to build the most beautiful buildings in the world – super quality, super modifications – and sell at a loss.”

[Financial Times] – Georgia Kromrei


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