RXR Puts Five Multifamily Assets on the Market
Gimme five! The sale includes RXR's interests in Extell's 555Ten and EVGB properties.
By Cathy Cunningham October 17, 2022 6:05 pm
reprints
RXR has put five Class A multifamily properties up for sale, Commercial Observer can first report.
In addition to selling its ownership interests in 555Ten and EVGB — two Extell Development rental properties the firm acquired a stake in last year — RXR is selling 475 Clermont in Fort Greene, Brooklyn; Harbor Landing at Garvies Point in Glen Cove, N.Y.; and Atlantic Station in Stamford, Conn.
Cushman & Wakefield (CWK) and JLL (JLL) are co-leading the marketing of the portfolio. No initial pricing guidance could be gleaned.
All of the buildings were constructed within the past six years, and each sits in a prime location close to mass transit. Together, the buildings comprise 1,831 rental units — 83 percent of which are market-rate — and the majority are fully stabilized.
The majority of the assets come with below-market, fixed-rate financing and can be purchased either individually or as part of a portfolio, sources familiar with the sale said. Indeed, in September last year, RXR refinanced the 363-unit 475 Clermont with a $143 million permanent loan from Metlife.
RXR officials declined to comment.
In an interview with CO in January to announce a rebranding on the firm’s 15th anniversary, RXR Chairman and CEO Scott Rechler described how the company was entering its next phase of growth. That included an expansion into new markets across the U.S. and across asset classes, including industrial, logistics, residential and hospitality.
Since the start of 2020, RXR’s multifamily portfolio has grown by 85 percent, with more than 11,400 units under management and development. Around 32 percent of the firm’s multifamily portfolio is outside of New York City.
In 2021 alone, during some of the darkest days of the pandemic, RXR invested $2 billion in multifamily rental assets, increasing its residential portfolio by over 3,500 multifamily rental units, and adding 2,100 units in the New York area — underscoring its commitment to its hometown during a time when several other investors were heading for the hills.
That activity included the acquisition of a 42 percent stake in 555Ten— at 555 10th Avenue — and EVGB — at 510 East 14th Street — from Extell Development.
The firm started shifting its investment focus away from offices into sectors with more attractive risk-adjusted returns in 2017, a move that was clear to see in its transaction activity and resulting portfolio composition.
Office transactions once accounted for roughly 58 percent of the firm’s activities, followed by residential deals (36 percent), and other assets comprising the remaining 6 percent of the mix. From 2017 onward, RXR’s transaction activity shifted to roughly 64 percent residential, with offices only accounting for 4 percent (and other assets accounting for the remaining 32 percent of deals).
That’s not to say that the office sector is on RXR’s naughty list by any means. Quite the opposite. It’s currently hard at work constructing 175 Park Avenue, its 1,575-foot, supertall, mixed-use tower at Grand Central Terminal, and just closed a $1.3 billion refinance for its 38-story office tower at 5 Times Square — despite the haunted forest that is the debt markets right now.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com
