RXR Undertakes $180M Recap of 530 Fifth Avenue With New Partner Sagehall

RXR has a new equity partner in its office building at 530 Fifth Avenue, and a new loan facility to boot, Commercial Observer has learned. 

Sagehall has joined RXR to recapitalize the 475,000-square-foot property, which sits two blocks west of Grand Central Terminal. The new partnership will infuse $70 million of new capital into the building, and has also secured a new, five-year, $110 million loan facility from ING Capital, according to property records. 

The dollars, which include future funding costs, will go toward repositioning the building, which stretches the length of the block between 44th and 45th Streets, and serves as flex space provider Convene’s flagship New York City location. 

Newmark’s Adam Spies, Josh King, Adam Doneger, Doug Harmon and Marcella Fasulo negotiated the transaction. 

“Through our Sagehall partnership, we’ve positioned 530 Fifth Avenue as a premier destination in one of New York’s most sought-after submarkets,” Scott Rechler, chairman and CEO of RXR, said in a statement. “As Convene’s flagship location, the building offers tenants access to best-in-class hospitality services and meeting spaces.”

Sush Torgalkar, previously CEO of Extell Development, founded Sagehall in 2020 with Lanhee Yung.

“After extensively tracking office investment opportunities in New York City post-COVID, 530 Fifth presents a unique opportunity to capitalize on the recovery in the office market and the continued appeal of the Grand Central submarket for tenants,” Torgalkar said in prepared remarks. 

The building’s occupancy is around 85 percent today. 

In December, The New York City Police Foundation, a nonprofit organization supporting law enforcement operations, signed a 7,803-square-foot lease for 11 years at the property. Other tenants include recruitment firm Major, Lindsey & Africa, PEI Group and Avison Young. Avison Young leases approximately 45,000 square feet. 

Convene occupies 116,000 square feet from the seventh through 10th floors at the building, which features top-tier amenities and terraces on some floors. 

Roughly 78,000 square feet of leases have been executed at 530 Fifth Avenue in the past two years, but the new Sagehall-RXR partnership isn’t stopping there. 

The new ownership has plans to continue repositioning and upgrading the property with a goal of completing its lease-up and stabilizing it. And who doesn’t love a makeover? 

CBRE (CBRE)’s Paul Amrich is leading the leasing efforts at the building. 

Cathy Cunningham can be reached at ccunningham@commercialobserver.com