RXR Realty, a real estate operating and investment company affiliated with Walton Street Capital, has agreed to acquire 237 Park Avenue from an entity controlled by Lehman Brothers Holdings Inc., it was announced today.
The transaction has a large equity component with a low-leverage, existing loan in place, according to Scott Rechler, chairman and chief executive officer of RXR. According to multiple reports, the closing price is approximately $800 million.
“A lot of people couldn’t do this because it required a lot of equity,” Mr. Rechler told The Commercial Observer earlier today. RXR had to assume the existing loan due to a high pre-payment penalty.
RXR had been tracking the property for a number of years and previously tried buying the debt, Mr. Rechler noted.
There is a plan in place to complete renovations on the building. RXR intends to renovate the lobby, update the building’s retail components, extend the frontage on Park Avenue and modernize the look and feel of the building, according to Mr. Rechler.
“This building will offer, when we are done with repositioning it, a good value opportunity for Park Avenue tenants,” Mr. Rechler said.
Located in the Grand Central District between 45th and 46th streets, 237 Park Avenue is a 21-story building with a total of 1.25 million square feet of office space. Current tenants include J.P. Morgan and J. Walter Thompson.
As reported by The Commercial Observer, RXR Realty signed a 99-year lease at 75 Rockefeller Plaza in January. In, September 2012, RXR completed the acquisition of 450 Lexington Avenue.
