Extell pays $931M to Silverstein Properties for former Disney campus in Lincoln Square

Extell Development through the entity SC Campus Owner LLC paid $931 million to Silverstein Properties through the entity Silverstein Galaxy Property Owner LLC for the former Disney and ABC studios campus including the properties 47 West 66th Street, 7 West 66th Street and 77 West 66th Street in Lincoln Square, Manhattan. This package is across 66th Street from Extell’s 50 West 66th Street tower construction project.
The deal closed on March 18, 2022 and was recorded on March 29, 2022. The six properties have 998,364 square feet of built space and 197,371 square feet of additional air rights for a total buildable of 1,154,490 square feet according to PincusCo analysis of city data. The sale price per built square foot is $932 and the price per buildable square foot is $806 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The signatory for Silverstein Properties was Michael L. Levy. The signatory for Extell Development was Marc Kwestel. Commercial Observer first reported that Silverstein Properties was selling the final part of the former Disney campus to Extell.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 47 West 66th Street.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Extell Development purchased 21 properties in four transactions for a total of $48.4 million and sold 67 properties including condos in 51 transactions for a total of $964.9 million over the past 24 months.
The seller Silverstein Properties purchased four properties in two transactions for a total of $287.2 million and sold three properties in three transactions for a total of $27.2 million over the same time period.

The property

The 47 West 66th Street parcel has frontage of 375 feet and is 100 feet deep with a total lot size of 47,698 square feet. The lot is irregular. The zoning is C4-7 which allows for up to 10 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Upper West Side / Central Park West Historic District. The city-designated market value for the property in 2022 is $72.2 million.

Violations and lawsuits

The properties were not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the properties have received nine DOB violations, $3,025 in ECB penalties, and $4,375 in OATH penalties in the last year.

Development

For the tax lot buildings, four out of the six buildings received a initial certificate of occupancy in the last ten years. There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Lincoln Square, the majority, or 67 percent of the 30.8 million square feet of commercial built space are residential elevator buildings, with specialty buildings next occupying 20 percent of the space. In sales, Lincoln Square has near average sales volume among other neighborhoods with $255.9 million in sales volume in the last two years and is the 30th highest in Manhattan. For development, Lincoln Square has had very little major development activity relative to other neighborhoods.It had 312,706 square feet of commercial and multi-family construction under development in the last two years, which represents 1 percent of the neighborhood’s built space.

The block

There are no active new building construction projects on this tax block.

The majority, or 69 percent of the 1.4 million square feet of built space are specialty buildings, with residential elevator buildings next occupying 31 percent of the space.

The seller

The PincusCo database currently indicates that Silverstein Properties owned at least 10 commercial properties with about 8 million square feet. (Market value is typically about 50% of actual value.) The portfolio has $3.4 billion in debt, with top three lenders as New York Liberty Development Corporation, Wells Fargo, and Bank of New York Mellon as trustee respectively. Within the portfolio, the bulk, or 90 percent of the 13,254,255 square feet of built space are office properties, with residential elevator properties next occupying 9 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Extell Development owned at least 44 commercial properties with 1,339,153 square feet and a city-determined market value of $264.6 million. (Market value is typically about 50% of actual value.) The portfolio has $4 billion in debt, with top three lenders as Blackstone Group, Prudential Credit Opportunities, and JPMorgan Chase respectively. Within the portfolio, the bulk, or 43 percent of the 1,339,153 square feet of built space are residential elevator properties, with hotel properties next occupying 21 percent of the space. They are all located in Manhattan.

Surrounding

Within a 400-foot radius of 47 West 66th Street, Pincusco identified three commercial real estate items of interests occurred over the past 24 months.
One of those three items was a sale which David Eisenberg bought the 212,000-square-foot, 122-unit co-op (D4) on 11 West 67th Street for $10.1 million from Emanuel Stern on June 18, 2021.
Of those three items, two were loans above $5 million totaling $420 million. The most recent of the two was Extell Development which borrowed $400 million from Bank OZK secured by the 339,993-square-foot, 128-unit rental (D6) on 15 West 65th Street and four other properties on February 28, 2022.

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