Gary Barnett sealed the deal on the biggest piece of his sprawling Midtown assemblage.
Barnett’s Extell Development closed on the development site at 405-417 Park Avenue for $500 million, sources familiar with the deal said. Barnett also purchased air rights from nearby Central Synagogue for $20 million and may be looking to buy at least two adjacent buildings to piece together an even bigger footprint.
The properties traded span the full blockfront between East 54th and East 55th streets. They were owned by two separate ownership groups: Swedish investor Corem Property Group AB sold 417 Park Avenue to Extell, while German asset manager DWS sold 405 Park Avenue. Both sellers and Barnett declined to comment.
The assemblage can support roughly 527,000 square feet of development as-of-right, or up to 700,000 square feet of rentable office space with additional air rights, according to marketing materials from Newmark, whose Adam Spies, Marcella Fasulo and Adam Doneger brokered the deal. CBRE’s Steve Siegel and a Fried Frank team advised on the air rights deal.
The developer is also in the process of acquiring the adjacent office building at 110 East 55th Street, according to sources. It’s unclear where those negotiations stand, though tenants in the building have been told to vacate by December, one source said. The property is owned by the Parkoff Organization. Adam Parkoff did not immediately respond to a request for comment.
Barnett may also have his sights on 111 East 54th Street, home to the private club The Brook. He has plans to buy that building and relocate the storied club to the former Friars Club building at 57 East 55th Street, which Extell recently purchased for $19 million, a source said. But a longtime doorman who answered the phone at The Brook on Friday said the building is not for sale and the club is not going anywhere.
Barnett’s site sits steps from JPMorgan Chase’s new 2.5 million-square-foot headquarters at 270 Park Avenue and near Citadel and Vornado Realty Trust’s planned tower at 350 Park Avenue, placing him in the center of Midtown’s next wave of trophy office towers.
The acquisition marks another major Midtown bet for Barnett, who has spent years amassing land and air rights across the Plaza District. While the ultimate plans for the site remain unclear, the scale and location suggest a premium office or mixed-use tower designed to compete with the corridor’s newest supertalls.
Extell is also developing a 29-story office and retail tower at 570 Fifth Avenue between West 46th and 47th streets and is building a residential supertall at 655 Madison Avenue.
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