RXR, Hudson Bay Capital Secure $320M to Acquire and Recap 620 Avenue of the Americas
The Gilded Age-era mixed-use office building spans more than 700,000 square feet
By Brian Pascus October 17, 2024 9:00 pm
reprints
Scott Rechler’s RXR and Hudson Bay Capital have secured a $320 million loan to jointly acquire and recapitalize 620 Avenue of the Americas, a 700,000-square-foot mixed-use office and retail property in Manhattan, Commercial Observer has learned.
RXR and Hudson Bay Capital now each own a 50-50 stake in the building and their joint venture partnership was formed as part of the transaction. The joint-venture acquired their control of the building from the building’s previous owner, a group of Canadian pension systems, according to a source close to the deal.
The firms secured the five-year $320 million loan facility from a consortium of lenders that includes Goldman Sachs (GS) and Blackstone (BX), according to a source close to the deal.
“This recapitalization, combined with overwhelming tenant demand both in the office and retail market, demonstrates that by applying capital and capabilities to the right asset with the right capital structure, iconic buildings like 620 Avenue of the Americas can thrive in a post-pandemic world,” said Scott Rechler, chairman and CEO of RXR, in a statement.
620 Avenue of Americas has faced leasing challenges in recent months.
More than 50 percent of the building’s space had been leased by WeWork and Bed Bath & Beyond, firms that have each declared bankruptcy in the last year.
Even so, RXR has buckled down to secure tenants across the property.
CO reported in September that Cole Haan signed an 11-year renewal to keep its 62,262-square-foot office on the entire third floor of the seven-story building. Moreover, 32BJ, a union representing thousands of service workers, inked a 20-year lease to expand by nearly 21,000 square-feet on the ground floor of the property.
All told, RXR has leased 300,000 square feet in the building over the last two years.
A product of the cast-iron era of Gilded Age architecture, 620 Avenue of the Americas was constructed in 1896. The building features sweeping, 100,000 square-foot floor plans, enormous rows of windows, and is located on the corner of West 19th Street and Sixth Avenue, near the residential neighborhood of Chelsea and a short walk from Madison Square Park.
RXR took full control of the building in 2012, after having initially purchased a 55 percent share in 2011.
“Given the dislocation in real estate markets, we believe high-quality assets paired with creative capital solutions can drive attractive risk-adjusted returns,” said Sander Gerber, CEO and CIO of Hudson Bay Capital, in a statement.
Brian Pascus can be reached at bpascus@commercialobserver.com
