Extell Secures $125M Loan for UES Resi Tower Project
Gary Barnett’s L-shaped project scored a “W” this week thanks to a $125 million debt package that refinances the planned Upper East Side tower.
German commercial lender Helaba provided the loan for Extell Development’s project at 1637 First Avenue, according to property records reported by the Commercial Observer. Helaba already demonstrated its confidence in the project in 2018, when it provided $118.2 million in financing to support the purchase of the 10 lots, along with development rights.
The loan is a victory on the site of many unexpected losses. Two tenants resisted on the site, forcing Extell to try to build around them.
Extell filed plans in November for a 22-story building on the First Avenue site between East 85th and East 86th streets. The building will be 215 feet tall and will include 543 apartments, as well as retail space.
The developer paid more than $77 million to develop the assembly, plus nearly $5 million for an easement and air rights. Recalcitrants in two buildings, however, made it difficult to reconstruct the site.
The famous Podolsky brothers were the first known holdouts, refusing to leave a building halfway down the block at 1645 First Avenue. Barnett told The Real Deal he made generous offers to multi-family owners to leave, but they refused.
A rent-stabilized tenant in one of the buildings also seems ready to stay put.
Extell commissioned SLCE Architects to design a building around them, which may have the effect of driving out tenants anyway, given the inconvenience of living next to noisy construction projects.
Elsewhere on the Upper East Side, Extell began work on its project on vacant land between East 79th and East 80th streets on First Avenue. The 30-story, 400,000-square-foot building being developed there is already partially pre-let to the Special Surgery Hospital. Extell reportedly intends to lease the upper floors to other medical tenants.
[CO] —Holden Walter-Warner