Extell Development, led by Gary Barnett, has entered into an agreement to sell its East Harlem development site located at 180 East 125th Street for a reported $70 million. This move comes after the firm had already shifted its plans for the property from a commercial office building to a residential development.
According to filings with the Tel Aviv Stock Exchange, first reported by Commercial Observer and PincusCo, the deal is set to net Extell approximately $64 million. The filing also indicated that while bids were being considered until late September, there was a possibility for an extension. As of yet, the identity of the buyer remains undisclosed, though speculation points towards Jacob Schwimmer of JCS Realty, who has recently established a shell company linked to the property’s address on East 125th Street. Schwimmer has not commented on the potential acquisition.
Extell’s history with the East 125th Street location dates back a decade when they acquired the 43,000-square-foot parcel for $39 million. An additional $21 million was invested to terminate a supermarket lease on the site, a decision that was met with local community disapproval. Initially, Extell envisioned an office development for 180 East 125th Street and even engaged Cushman & Wakefield to handle marketing for the property. However, the onset of the pandemic and the subsequent downturn in the commercial real estate market prompted a change in direction.
Early in the previous year, Extell revised its strategy for the East 125th Street site, proposing a 415,000-square-foot residential project instead. The plan for 180 East 125th Street included a 15-story building featuring 543 apartments and 25,000 square feet of commercial space, with Brooklyn Fare grocery being considered as a potential anchor tenant for the ground floor.
Interestingly, the height of the proposed development at 180 East 125th Street would have mirrored a nearby site at 160 East 125th Street, which was also previously under Extell’s ownership. In 2023, the Metropolitan Transportation Authority (MTA) purchased 160 East 125th Street for $82 million. This acquisition is believed to be integral to the MTA’s long-term plan to extend the Second Avenue subway line, potentially incorporating a terminal at that location.
The sale of 180 East 125th Street marks a complete exit from this development project for Extell. The future of the site now rests with the unidentified buyer and their vision for this prominent location on East 125th Street in East Harlem.
