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Extell is teaming up with RXR Realty to finance three new residential projects in Manhattan.
RXR is lending Extel $463M at 7%, in exchange for a preferred equity stake in the projects that entitles RXR to 50% of their future cash flows, Bloomberg reports.
Initial talks for the deal began about eight months ago. The projects will be priced toward a lower segment of the market than ultra-luxe developments like Extell’s One57.
That’s due to the uneasiness surrounding the ultra-luxe segment of the market and the fact that Extell acquired the land for the new projects at low cost, allowing units to go for $1M to $3M and still net Extell and RXR a healthy profit.
In total, the projects will create 1,778 residential units, about 200k SF of retail and cost about $2B. They include a rental tower at 555 10th Ave, a rental and retail building at 500 East 14th St, and an 80-story condo tower at 250 South St. [Bloomberg]
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