RXR Exploring Conversion of 5 Times Square Office Building Into Residential: Sources

One of the premier office buildings in New York City might be getting a residential facelift. 

RXR is exploring whether to convert a portion of 5 Times Square, a 1.1 million-square-foot, 39-story office tower in the heart of Manhattan, into residential space, according to sources close to the process. 

The sources, who spoke on condition of anonymity, told Commercial Observer that space in the office tower has now been taken off the CoStar listings service and that the building’s leasing team had said that the tower is currently not looking for new commercial tenants. 

The building at 5 Times Square is jointly owned by Scott Rechler’s RXR and Marc Holiday’s SL Green (SLG). Two years ago, the partnership secured a $1.3 billion refinancing package to upgrade the 22-year-old glass office property. Lending partners involved in the refinancing included Morgan Stanley (MS), Apollo Global Management (APO) and AIG. An additional $300 million was invested by ownership into upgrading the building, while SL Green converted $139 million of mezzanine debt into equity. 

The renovation subsequently improved the lobby, restrooms and elevators, and created a new 32,000-square-foot amenity space that featured a fitness center, a luxury lounge, a restaurant bar, and two golf simulators. 

The building has been part of RXR’s portfolio for a decade now, with the firm — together with partner David Werner Real Estate — purchasing it in 2014 for $1.5 billion. 

For years, 5 Times Square was famous for its angular glass-encased architecture and the unmistakable Ernst & Young sign that hung diagonally across 22 stories of the northeast facade — that is, until the accounting giant announced in 2017 it would be leaving its 604,000 square feet of office space for new confines at Hudson Yards across town. 

As of September 2022, 5 Times Square was only 31 percent occupied, Bloomberg reported. 

It is unclear exactly how much space or square-footage ownership is willing to convert into residential, but one source close to the deal said that RXR might follow the pattern it’s exploring at the Helmsley Building. 

CO reported last month that RXR is now studying the feasibility of converting a portion of the 34-story office tower at 230 Park Avenue, nine months after a $670 million loan backing the property entered special servicing due to “an imminent maturity default,” according to commentary provided by Morningstar. 

RXR declined to comment. 

Brian Pascus can be reached at bpascus@commercialobserver.com