Barnett Offers Stake in NY Residential Project
Developer Gary Barnett is marketing a 49% stake in the leasehold interest in a residential tower he’s constructing on Manhattan’s burgeoning Far West Side.
The 52-story project, at 555 10th Avenue, has a potential value of $700 million. It will encompass 598 apartments and a 300-bed dormitory. Eastdil Secured is advising Barnett’s Extell Development of New York.
By offering a 49% interest, Barnett is tailoring the offering for foreign bidders, including sovereign wealth funds. Foreign investors often limit purchases to minority stakes to avoid an onerous tax — typically 35% of profits — that’s assessed when a stake of 50% or more is sold. Even if Barnett ends up selling to a domestic investor, the inclusion of foreign bidders can drive up the price. The equity partner would likely collect a preferred return until construction wraps up in the second quarter of 2017.
The site stretches from West 40th Street to West 41st Street on the west side of 10th Avenue. Students would have an entrance on West 41st Street, while renters would use an entrance on 10th Avenue. The dorm rooms — which will likely be leased in bulk to one college — will be on floors 2-7, with the apartments on top. About 120 apartments will be set aside as affordable housing.
The amenities for the rental units include a bowling alley, a children’s lounge, a dog-washing area, a lap pool, a yoga studio and a rooftop pool area with cabanas.
In 2011, Barnett signed a 99-year lease on the underlying ground with the estate of Sol Goldman. He also purchased air rights from the adjacent Church of Saints Cyril & Methodius and Saint Raphael. The tower will cantilever over the Croatian church.
Barnett is separately marketing the 38-unit rental portion of One57, a luxury residential tower at 157 West 57th Street, along “Billionaire’s Row.” That roughly 1,000-foot-tall property also includes 94 residential condominiums and the 210-unit Park Hyatt New York. The whisper price for the apartment listing is $250 million, or a staggering $6.6 million/unit. Eastdil also has that listing.