Two developers are preparing to share the love on Fifth Ave. between West 46th and 47th streets while another prolific owner has become the great spoiler.

We can now reveal that public documents show SL Green Realty Trust has already paid $146.2 million towards developing 45,000 square feet of retail along Fifth Ave. in a series of deals with Gary Barnett’s Extell Development.

Extell, the developer of the skyscrapers at One57 and the upgoing Nordstrom Tower, needs air rights for yet another project. It already owned 570 Fifth, and has now sold everything under 180 feet to SLG for $34,871,556. Similarly, at No. 576 Fifth, Extell sold everything under 180 feet to SLG for $43,811,424.

On the south corner of the same blockfront at 46th Street, the L-shaped building at 562 Fifth was sold to the two companies by an entity of the late Elmer Ellsworth Smathers of Florida. The land was sold to SLG for $67,539,000 while the air above 180 feet was sold to Extell for $11,661,000.

Barnett has long been assembling air and land on this block for his now-open International Gem Tower.

Barnett intends to take this new air, also known as transferable development rights and move it to an adjacent site he owns on West 46th Street a few steps west of Fifth Ave.

This will enable Barnett to develop a tower that will at various heights also cantilever over a portion of the upcoming shorter SLG retail building. At 140 feet in the air, documents show the new tower will hover 50 feet across the SLG portion.

SLG’s CEO Marc Holliday did not reveal the location on the company conference call last week but said, “Obviously, given the vague disclosure, it’s a highly-sensitive and dynamic situation. So it’s tough to offer much more color. We think it’s a site with enormous upside. It’s highly, highly under-utilized. There are just some incremental transactions we’re working on, which will allow us to fully exploit the value of the site. So we purchased it completely off market, and we’re trying to keep the balance of our discussions under radar and off market.” We say, good luck with that.

Now we come to the “incremental transactions” and the spoiler alert.

The 12-story corner building at No. 562, designed by Warren & Wetmore in 1921, has its broader façade along 46th Street. It is on a long-term master lease through 2025 to Bank Leumi, which also owns No. 564 Fifth outright.

The buildings are also interconnected through an easement.

Last fall, we revealed that developer Joe Sitt of Thor Equities was in contract with Bank Leumi for the remaining 12 years on the master lease as well as the Swiss chalet-like 564 Fifth for a price of roughly $105 million.

The white and timber- trimmed 1945 building was once known as Finchley’s Castle. It was built for Edmund Goodman’s men’s store.

Jordache Group, a holding company for Joe, Rafi and Avi Nakash, and the licensee for US Polo Assn., is Sitt’s partner on this purchase and expects to install its store there.

To date, Sitt has not closed on either deal.

Sources tell us Barnett previously passed on what he considered a high price, but now, with SL Green as a deal partner and eager to move forward, he may be kicking himself for wanting to wait out the dozen years.

A spokesman for Thor said they have “been bullish on Fifth Avenue between 42nd and 50th streets for years, and SLG’s purchase of the land at 562 combined with our own negotiations to bring US Polo in at 564 speaks volumes about this area’s upward trajectory. Along with our partners at Nakash, we look forward to repositioning these buildings to match the massive demand that we’re seeing through this stretch of Fifth Ave.”

Nevertheless, we believe the trio are now in negotiations. Two other buildings that eluded Barnett’s earlier Gem Tower TDR collections may also be incorporated into this new tower site.

“Gary is assembling in this area and he is a very patient fellow and looks at things on a long-term perspective,” said Bob Shapiro of City Center Real Estate, who specializes in air rights transactions but is not working on this one.

None of the other parties would discuss these future developments, so stay tuned.


Standard Bank has signed a 23,411 square-foot lease on the 28th floor at 520 Madison Ave., where it will be moving from multiple floors at 320 Park Ave.

Matthew McBride, Greg Tosko and Michael Whelan of CBRE repped the bank while the Tishman Speyer ownership handled the deal in house.

The space is currently raw and we hear it will be built out in time for a move in the last half of 2014.