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Orthodox Real Estate Magnate Brings Nordstrom to Manhattan

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Gary Barnett, an Orthodox Jew, has become one of the leading real estate figures in New York City as head of Extell Development Company.The real estate world is buzzing about Nordstrom Inc., a popular department store chain with more than 100 locations, which is preparing to open its first full-service store in Manhattan.

Gary Barnett, an Orthodox Jewish real estate mogul, has played a key role in securing the new site for Nordstrom, which sells clothing, jewelry, cosmetics and accessories for adults and children. Last week’s announcement of the new store concludes a search for an appropriate Manhattan site that lasted for over two decades.

Barnett, a billionaire, is the president of Extell Development Company, a famous real estate development firm based in New York City. The Seattle-based Nordstrom chain revealed that it will own and occupy the seven-story, 285,000-square-foot base of a tower that will be built by Extell at Broadway and West 57th Street, near Columbus Circle and Carnegie Hall.

The agreement was announced at a press conference with Barnett, Mayor Bloomberg and Peter Nordstrom, the retailer’s president of merchandising. “We’ve had the intention and the drive, gosh, probably for the last 25 years to try to be here,” Nordstrom said. “We fully expect this to be our most successful store.” He disclosed that he was convinced to choose the new location because of “the amount of people and the possibilities” in the surrounding area.

Nordstrom has grown from a single shoe store in Seattle that opened in 1901 to a national department store chain with a strong emphasis on customer service. It operates 231 stores in 31 states, including 117 full service stores. “The new tower will be a smart fashion statement,” enthused Mayor Bloomberg. “It will create a thousand new jobs and 5,000 construction jobs.”

Before settling on the West 57th Street location, Nordstrom considered such sites as Related Companies’ Hudson Yards project on the Far West Side; 909 Third Ave. and the former Drake Hotel site, both on the East Side; and Sixth Avenue and West 31st Street, south of Herald Square. 

“They’ve been spotted in New York now for the past 20 years,” Benjamin Fox, executive vice president for retail leasing at New York-based Massey Knakal Realty Services, said about Nordstrom. “To say this was long in the making is an understatement.”

While Peter Nordstrom chose not to reveal the amount his company is paying Extell for the store, Barnett noted that the new tower will be financed by Nordstrom’s input, “very substantial equity” and a memorandum of understanding from a bank. “We have pledged to Nordstrom that they will anchor an iconic tower,” Barnett said during the press conference.

In addition to a Nordstrom Rack outlet on 14th Street in Union Square, the chain runs Treasure & Bond, a “concept store,” on West Broadway in Soho. Treasure & Bond donates the entirety of its profits to children’s charities in New York. Barnett stated that the construction process on the Extell tower may commence in the first quarter of next year, and is scheduled to be completed in 2018. The building will also include residences and a hotel, he noted.

“This is going to make the West Side a true shopping mecca that’s competitive with the East Side,” commented Faith Hope Consolo, the chairman of retail leasing at Prudential Douglas Elliman. Calling the new location a “smart move” for Nordstrom, retail broker Joanne Podell of Cushman & Wakefield said, “It’s an important corridor where there is still value and they would do very well there.”

Barnett, one of Manhattan’s busiest developers, is currently constructing the 90-story One57, New York’s tallest residential tower, just one block east of the imminent Nordstrom site. His other properties include the Lucida, the Avery and the Rushmore. Extell is also involved with construction and asset management of office, retail and multifamily properties. The real estate firm has a reputation for keeping up an accelerated pace of property development.

‘We have a desire to deliver a great value’

A graduate of New York University and Hunter College, Gary Barnett originally worked in the diamond business, spending time at S. Muller & Sons in Belgium. Switching gears to real estate, Barnett started investing in several Midwest properties before setting his focus on property development. The construction of the Planet Hollywood Hotel on Broadway and 47th Street was a highlight of his career as a builder.

After joining forces with Carlyle Group to purchase Donald Trump’s Riverside South, Barnett took charge of renovating the old Stanhope Hotel on Fifth Avenue, and converted it into the luxury 995 Fifth. Additionally, he built a 60-story condominium tower, the Orion, on West 42nd Street. 

As president of Extell Development, Barnett oversees a real estate portfolio covering more than 10 million square feet of residential, hotel, commercial and retail space, as well as other land and golf course development areas. “You can see from the quality of our buildings,” Barnett once said, “we have a desire to deliver a great value, be honest with our buyers and do what’s best for our clients by creating something beautiful and long lasting”.

Barnett lives with his wife Ayala in the Richmond Hill section of Queens.

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