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Extell Sells Large Stake In $800M Rental Portfolio Amid Slow Sales On Billionaires' Row

555 10th Ave., a new rental building in Hudson Yards built by Extell Development.

Extell Development has sold a large stake in two of its luxury apartment buildings as it raises cash amid a still-struggling high-end condo market.

RXR Realty bought a 42% stake in a two-building, 750-unit Extell Development portfolio for roughly $300M as the Manhattan rental market continues to hurt amid the coronavirus pandemic, the Financial Times reports. The buildings at 555 10th Ave. in Hudson Yards and 510 East 14th St. in the East Village, were valued at around $800M at the time of the sale, or $200M less than they were at before the pandemic, according to the FT. 

In January, rents in Manhattan were down 19% year-over-year, the second-lowest point since the pandemic took hold in the city. While experts say rents may have hit their lowest point in November — when prices were down 21.7% year-over-year — the recovery will be a slow one.  

Extell Development has changed the skyline with its condo development in recent years, including ultra-luxury projects along Billionaires’ Row such as the 131-story, 1,550-foot  Central Park Tower, the second-tallest building in the nation after the Freedom Tower. 

The developer has a $900M construction loan on the project from JPMorgan Chase that matures this year, and not many of the condos, which were projected at a $4B sellout, have yet been sold.

This comes amid a tumultuous time for the city’s residential sales market, particularly at the top of the market. The condo market has been oversupplied since before the pandemic took hold and the health crisis only made it worse. As of June, there were 15,000 unsold units throughout the city, roughly 15% of which were split among six buildings.

Extell owns two of those large, new buildings with lots of inventory, and neither one of them is Central Park Tower. They are its One Manhattan Square condo building in Two Bridges and its Brooklyn Point skyscraper, which combined have nearly 1,300 units.

Extell has more than $1B combined in construction loans between One Manhattan Square and Brooklyn Point, in addition to the $900M it owes on Central Park Tower. RXR Realty owns mezzanine loans to Extell on both of those buildings, which have debt maturities in 2022. RXR also owned mezzanine debt on the rental portfolio in which it now has a 42% stake, according to The Real Deal.