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Extell Sells Undeveloped East Side Site To Chinese State-Owned Developer

Extell Sells Undeveloped East Side Site To Chinese State-Owned Developer
499-501 Third Ave. on the East Side of Manhattan

Extell Development has reportedly sold a plot of land on the East Side to a company owned by the Chinese government, continuing its pattern of dealmaking with China.

China Overseas Land & Investment Ltd., a subsidiary of the state-owned China State Construction Engineering Corp., bought 499-501 Third Ave. from Extell for $75M, The Real Deal reports. The land is currently occupied by a five-story apartment building with restaurants on the ground floor on the edge of the Kips Bay and Murray Hill neighborhoods.

Extell purchased 499 and 501 Third Ave. in deals totaling $16.5M in 2015, before buying a neighboring building on Third Ave. for $11.25M, transferring its air rights to 499-501 Third and reselling it for $7.2M in 2016, according to TRD. The wheeling and dealing left 499-501 Third with 135K SF in development rights, and Extell has since filed permits for a 13-story mixed-use property that have not yet been approved.

China Overseas adds the development site to its New York-area properties, including the under-construction condo tower at 99 Hudson St. in Jersey City, which will be the tallest building in the city, at 900 feet, when complete. The Chinese government recently restricted overseas investment in real estate, promising to heavily scrutinize every dollar that leaves its shores. Either a different test is applied to the state's own companies, the funds used for this purchase were already overseas or this $75M purchase passed muster.

Extell cashed in on this undeveloped property as it has multiple, larger projects with Chinese capital sources still very much up in the air. Its Central Park Tower is under construction, but not yet fully financed, and partner SMI USA, a subsidiary of Shanghai Municipal Investment, will pull out of its stake if Extell cannot get it funded by June. Extell also recently brought in a Hong Kong-based investor on its Lincoln Square condo development.