Gary Barnett’s Extell Development has scored a a $3 billion, according to EB-5 investor, joint venture with Shanghai Municipal Investment (SMI), the state-run firm best known for developing China’s tallest building, to build a 95-storey tower on Manhattan’s Billionaire’s Row at 225 West 57th Street.
In a joint announcement on Thursday, Extell and SMI revealed plans to build the New York’s Tallest Tower. A 1, 550 foot (472 metre), mixed residential and commercial project fronting on New York’s Central Park. The building scheduled for completion in 2019.
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The partners say their project will be the second-tallest building in New York and the highest residences in the western hemisphere, once Central Park Tower tops out.
“We are excited to be able to participate in the development of the tallest residential tower in New York City, on a conservative high return basis, ” said Tom Tao, President of SMI USA.
The tower would be an encore for Extell, which kicked off a new era of excess on Billionaire’s Row when it began sales of condos at its high-end One57 in 2011.
The project is the third major investment in New York for the Chinese firm and it comes at a time when other projects on Billionaire’s Row have faced slowing sales, the Mingtiandi reports.
Although early sales at One57 were brisk, with Extell still struggling early this year to sell off the last 22 units in the building. The developer went so far as to spend $1 million to fit out a single unit in the hopes of enticing a buyer, according to a report in the Wall Street Journal.
According to regulatory filings on the Tel Aviv Stock Exchange in May 2015, Extell sold $300 million worth of bonds, a 87 percent of the equity in the project. Compare that to Extell’s exposure at One57, where it owns just 12 percent of the equity, according to The Real Deal.
“This strategic alliance with SMI brings together two international industry leaders with a track record of creating iconic global skyscrapers. SMI has developed the tallest building in Shanghai and we look forward to our partnership as we jointly develop the tallest building in New York City, ” said Gary Barnett, founder and CEO of Extell.
“We believe the superb location, views, design and quality of Central Park Tower will make it the most important residential building ever to be built in New York City and expect it to be a great success for Extell and SMI, ” Barnett added.
In the joint statement, the two companies indicated that SMI had invested on preferred basis and was expected “to receive a return of 20 percent to 30 percent per annum over the course of the project.”
The partnership is employing international architecture firm Adrian Smith + Gordon Gill Architecture, to design Central Park Tower. Their projects include the world’s current tallest building, the Burj Khalifa in Dubai, as well as the future tallest building, the Kingdom Tower in Saudi Arabia.
