{"id":72005,"date":"2025-12-16T08:27:24","date_gmt":"2025-12-16T08:27:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/72005\/"},"modified":"2025-12-16T08:27:24","modified_gmt":"2025-12-16T08:27:24","slug":"gary-barnett-is-chasing-cash-flow-over-condos","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/72005\/","title":{"rendered":"Gary Barnett Is Chasing Cash Flow Over Condos"},"content":{"rendered":"

Gary Barnett<\/a>\u00a0has already established his legacy as one of New York City\u2019s top luxury condo developers. Now, with a plethora of discounted sites at his fingertips and a subdued condo market, the man who redefined\u00a0building for the ultra-wealthy is entering a new era.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Billionaires’ Row, with Extell Development’s Central Park Tower on the far left, next to its One57 project.\n <\/p>\n

His firm, Extell Development<\/a>, has been on a dealmaking blitz, unusual for a company that has historically moved slowly and silently.\u00a0Its upcoming New York City projects range from hotels and offices to even healthcare<\/a>, a departure from the for-sale residential towers \u2014 including two Billionaires\u2019 Row supertalls \u2014 that Barnett has built his reputation on.<\/p>\n

\u201cOur intention is to move the company much more in the direction of build-to-cash flow or buy-to-cash flow,\u201d Barnett said during a conference call with investors on Nov. 30. \u201cThat doesn’t mean we won’t do any more condos. We still probably will, if the right opportunity comes along, but that’s not our focus.\u201d<\/p>\n

Extell isn\u2019t public in the U.S., but it is among several real estate firms that raise money from Israeli bondholders. That process requires certain public disclosures on the Tel Aviv Stock Exchange<\/a>, where the conference call was accessed by Bisnow.\u00a0<\/p>\n

Through a spokesperson, Barnett declined to answer questions about the pivot from condos to cash-flowing properties.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Bisnow\/Sasha Jones\n <\/p>\n

\n Gary Barnett at Bisnow’s New York Healthcare Real Estate Conference in June.\n <\/p>\n

Still, his comments\u00a0on\u00a0the call provide\u00a0a window into his thought process around Extell\u2019s myriad new developments in the works across Manhattan and recent purchases that have raised eyebrows.<\/p>\n

He is building a medical office tower on the Upper East Side, an Ikea-anchored office building on Fifth Avenue and an eye-popping hotel and amusement ride attraction in Times Square. He also bought a loan tied to a struggling Midtown office tower and is in position to foreclose on its owners.<\/p>\n

All this is coming after\u00a0most of\u00a0Extell\u2019s\u00a0recent projects\u00a0have ridden the luxury sales boom that followed 2008, when investors looked to tangible assets to store their wealth. But an increase in supply, along with economic headwinds, started cooling the market<\/a>\u00a0around 2015.\u00a0<\/p>\n

Another burst of activity came in 2021 as interest rates<\/a> reached all-time lows. The market has since softened again. Sellers have had to mark down apartments from the soaring\u00a0prices they once thought were achievable.\u00a0<\/p>\n

At\u00a0Central Park Tower<\/a>\u00a0\u2014 at 1,550 feet, the world’s tallest primarily residential building \u2014 a duplex once asking $175M sold for $115M last year<\/a>. Another penthouse in the building went from asking $250M in 2022 to $195M a year later.<\/a><\/p>\n

In at least one of its condo projects, Extell has adjusted its strategy to bring in cash as it pays down debt. Barnett told investors that the company is renting certain units in\u00a0One Manhattan Square<\/a>.<\/p>\n

As of Sept. 30, the 212 apartments in the 815-unit building were being rented, according to the company\u2019s third-quarter report, filed on the Tel Aviv Stock Exchange. The building is\u00a0more than 70% sold, Barnett said on\u00a0the call.<\/p>\n

\u201cWe\u2019ve paid down over $50M of debt on our rental component in OMS as we sell,\u201d Barnett said.<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Extell Development’s One Manhattan Square\n <\/p>\n

The developer\u00a0sold the final unit at\u00a0One57<\/a>, his first supertall on Billionaires\u2019 Row that looms 1,000 feet over Manhattan, Crain’s New York Business\u00a0reported this month<\/a>. The project was delivered in 2013 but never achieved the sales momentum Barnett hoped.<\/p>\n

\u201cIt was not a loss,\u201d he told\u00a0Crain’s. \u201cIt was profitable, but not for 29 years of really hard work and nail-biting situations.\u201d<\/p>\n

Compared to those shiny supertalls, one of his most recent purchases looks vastly different. Barnett reportedly\u00a0bought the mezzanine debt<\/a>\u00a0on\u00a0Worldwide\u00a0Plaza\u00a0last month, effectively giving him control of the nearly 2M SF office tower.\u00a0<\/p>\n

After the building at 825 Eighth Ave.’s\u00a0occupancy\u00a0fell from 91% in 2023 to 63% in March and an appraisal in April\u00a0slashed the Midtown tower\u2019s<\/a> value by\u00a080%, its owners defaulted on their obligations. Barnett, as the mezzanine lender, scheduled an auction for the property’s ownership for Jan. 15,\u00a0Bisnow first reported<\/a>.\u00a0<\/p>\n

At the same time, Barnett is continuing to build new. Among Extell’s earliest projects in the pivot is 1520 First Ave., a\u00a0435K SF medical office tower anchored by the Hospital for Special Surgery that delivered this year.<\/p>\n

It took a decade to piece together the site, Barnett said at a\u00a0Bisnow event<\/a> in June.\u00a0<\/p>\n

\u201cWhen we had the site fully assembled, we had to decide what to do with it. We had lots of condos, so I figured, \u2018What the hell, let’s build a medical center,\u2019\u201d Barnett said onstage. \u201cThe truth is that we did see an opportunity to diversify somewhat, and we saw a need in the marketplace.\u201d<\/p>\n

\"Placeholder\"\/<\/p>\n

\n One Worldwide Plaza, the troubled Midtown tower that Extell bought the mezzanine debt on.\n <\/p>\n

But Extell’s most dramatic venture is 740 Eighth Ave., where Extell is building a supertall mixed-use hotel featuring a drop ride a thousand feet above Times Square. Roughly nine floors of the 52-story tower have risen so far, he said.<\/p>\n

He\u00a0said on the Nov. 30 call that Extell expects to close a construction loan for the project, known as\u00a0The Torch<\/a>, during the first quarter. Bisnow previously reported that the firm has lined up as much as\u00a0$1.3B in financing<\/a>\u00a0for the development.\u00a0<\/p>\n

\u201cWe’re in a position where the hotel could open up in less than three years. The building should be finished in four years,\u201d Barnett said. \u201cWe’re expecting it to generate enormous cash flow for the company.\u201d<\/p>\n

The company already owns a handful of hotels in Times Square and resorts in other parts of the country, as well as operating third-party management firm Extell Hospitality Services.<\/p>\n

The portfolio also includes a few rental properties and two offices: the Insurance Exchange Building in Chicago and the International Gem Tower, specifically designed for jewelers in New York City\u2019s Diamond District.<\/p>\n

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\n A rendering of The Torch at 740 Eighth Ave.\n <\/p>\n

Barnett is known for taking his time to piece together assemblages. Several of his projects have been decades in the making, such as\u00a0570 Fifth Ave<\/a>., where he is planning a full-block office tower with\u00a0Ikea<\/a>\u00a0occupying the retail space at its base.<\/p>\n

The real estate downturn\u00a0has\u00a0sped up his ability to accumulate assets. Extell picked up 655 Madison Ave.\u00a0for approximately $160M<\/a>\u00a0after\u00a0Williams Equities<\/a>\u00a0was determining a new future for the building, having already filed a demolition permit at the site. There, Barnett is planning a mixed-use supertall with residential, office and retail, according to filings with the Department of City Planning.\u00a0<\/p>\n

Extell\u2019s project pipeline also includes the former Wellington Hotel at 871 Seventh Ave., where it is planning a 1,050-foot tower with 156 hotel rooms, 130 residential units, 55 parking spaces and ground-floor retail, according to city filings.\u00a0<\/p>\n

The developer also acquired\u00a0the multiproperty former Disney campus on Columbus Avenue and West 66th Street. The firm has filed permits to build\u00a0a 25-story building<\/a>\u00a0at 37 W. 66th St., though Barnett has a habit of changing plans to dramatically add square footage later in the process.<\/p>\n

It is also planning a 1,200-foot tower at\u00a077 W. 66th St. that has faced pushback from the well-to-do neighborhood, with actor Tony Danza leading protests<\/a>\u00a0against Barnett.<\/p>\n

Many of the coming projects are being supported by\u00a0$1.2B of preferred equity<\/a>\u00a0from an unidentified hedge fund,\u00a0Bisnow first reported. Barnett said the financing deal closed in early July and that \u201cwe have all the money we need\u201d as a result.\u00a0<\/p>\n

\"Placeholder\"\/<\/p>\n

\n Courtesy of KPF\n <\/p>\n

\n A rendering of Extell Development’s 570 Fifth Ave. office project\n <\/p>\n

During the call, Barnett was questioned by Israeli bond investors about Mayor-elect\u00a0Zohran Mamdani<\/a>\u00a0and the impact the democratic socialist would have on the city. In response, the developer said that \u201cwe worked very hard to defeat him\u201d but that he was \u201ccautiously optimistic\u201d now that Mamdani has been elected.<\/p>\n

Barnett was among the real estate executives who financially backed former\u00a0Gov.\u00a0Andrew Cuomo<\/a>\u00a0during the race. Following Mamdani\u2019s victory in the primary, Barnett and his firm\u00a0donated nearly $300K<\/a>\u00a0to political action committees supporting the former governor.\u00a0<\/p>\n

\u201cOf course, economically, we’re concerned that he does stupid things in order to raise money to give away to his voters,\u201d Barnett said. \u201cThat’s a concern because one of the engines of creating taxes and revenue for the city [is] real estate.\u201d<\/p>\n

Mamdani will take office at the beginning of the year and has introduced\u00a0a transition team<\/a>\u00a0to guide him as he settles into the role. Among those involved in the transition are\u00a0Partnership for New York City<\/a>\u00a0President\u00a0Kathryn Wylde<\/a>, Open New York Executive Director Annemarie Gray and\u00a0Two Trees Management<\/a>\u00a0CEO\u00a0Jed Walentas<\/a>, who serves as the chair of the\u00a0Real Estate Board of New York<\/a>.\u00a0<\/p>\n

Barnett said that the appointments have been \u201cpretty reasonable.\u201d<\/p>\n

\u201cMost of them are not far-out lefties, stars in the eyes, \u2018We can do anything,\u2019\u201d Barnett said. \u201cOn the other hand, most of them will take direction, and they’re certainly still leaning left.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Gary Barnett\u00a0has already established his legacy as one of New York City\u2019s top luxury condo developers. Now, with…\n","protected":false},"author":2,"featured_media":72006,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[36691,36693,36686,1512,9,24,55,54,56,36688,36687,36689,36690,36692,23353,82],"class_list":{"0":"post-72005","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york-city","8":"tag-1520-first-ave","9":"tag-570-fifth-ave","10":"tag-extell-development","11":"tag-gary-barnett","12":"tag-new-york","13":"tag-new-york-city","14":"tag-new-york-city-headlines","15":"tag-new-york-city-news","16":"tag-ny","17":"tag-one-manhattan-square","18":"tag-one57","19":"tag-tel-aviv-stock-exchange","20":"tag-the-torch","21":"tag-wellington-hotel","22":"tag-worldwide-plaza","23":"tag-zohran-mamdani"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/72005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=72005"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/72005\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/72006"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=72005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=72005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=72005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}