RXR Sells Stake in 61 Bway, Recapitalizes Debt With $290M Loan
By Danielle Balbi April 22, 2016 8:00 amreprints
Scott Rechler sure must be filling out a lot of paperwork this week.
His real estate company RXR Realty sold a 49 percent stake in 61 Broadway to an affiliate of China Orient Asset Management yesterday and closed a $290 million mortgage from Bank of China and SL Green Realty Corp. on the 33-story FiDi office tower, sources told Commercial Observer, retaining 51 percent for itself.
The sale price of the stake in the building was roughly $215.6 million, and was based on a gross valuation of $440 million. CO first broke the news in December 2015 of RXR’s contract to sell a stake in the property, which is located between Rector and Morris Streets, to an overseas investor. JLL brokers Scott Latham, Richard Baxter, Anthony Ledesma, Stephen Shapiro, Jon Caplan and Yoron Cohen negotiated the deal.
“We are thrilled to have China Orient join us as our new partner and are pleased that we were able to create meaningful value by upgrading 61 Broadway and executing more than 100,000 square feet of leases at extremely attractive rents,” Mr. Rechler, who landed the number five spot on CO’s new Power 100 list, said in prepared remarks provided to CO. “We look forward to executing the next level of value creation as we recapture space and release it at higher rents to the dynamic 21st century tenants that 61 Broadway is now attracting.”
Tenants at the building include Bjarke Ingels Group, which occupies the penthouse, law firm Godsky & Gentile, and securitization company Samuel A. Ramirez & Co. Think tank Human Conditional Global recently signed a lease at the building for a full floor of just over 24,400 square feet and data governance firm Collibra signed on for more than 12,000 square feet.
Roy Chen, the managing director of China Orient, said in prepared comments, that 61 Broadway’s fundamentals are consistent with its U.S. strategy of acquiring assets with value-add opportunity and locally-based operators.
Mr. Rechler’s Long Island-based firm purchased the 787,000-square-foot building in May 2014 for $330 million, property records indicate.
While a spokesman for RXR declined to comment on the financing, a source with intimate knowledge of the transaction confirmed that Bank of China originated a $240 million mortgage and SL Green provided a $50 million mezzanine loan to recapitalize the property. The new financing, which closed yesterday, replaces $200 million in debt that HSBC provided on the property at the time of the acquisition.
A spokesman for SL Green declined to comment. A representative for Bank of China declined to comment. Representatives for JLL did not immediately respond to comment.