RXR Closes on Nearly $1.1B Buy of 590 Madison Avenue

Scott Rechler’s RXR has clinched the deal to buy 590 Madison Avenue for just under $1.1 billion, according to property records.

The $1.08 billion deal has been in the works since at least May when Commercial Observer reported that RXR was in discussions with the State Teachers Retirement System of Ohio (STRS Ohio), which listed the 42-story property in the Plaza District for the same amount back in February.

Elliott Investment Management is an equity partner in the acquisition.

“This acquisition underscores RXR’s conviction in the strength of the Manhattan office market,” Rechler said in a statement. “Throughout the depths of the office cycle, we have been strategically acquiring best-in-class properties in irreplaceable locations at substantial discounts to replacement cost. 590 Madison, one of Manhattan’s premier office assets, represents exactly the kind of trophy asset that will continue to command premium rents and attract the most sought-after companies.”

STRS Ohio did not immediately respond to a request for comment.

Eastdil Secured’s Will Silverman, Gary Phillips and Roy March brokered the deal, but declined to comment.

Apollo Global Management provided a $650 million acquisition loan to RXR.

As part of a larger investment strategy, RXR is targeting the acquisition of Class A buildings owned by entities looking to reduce exposure to the office.

Apollo did not immediately respond to a request for comment.

The 1 million-square-foot office building between East 56th and East 57th streets was once known as the IBM Building before the technology firm consolidated its offices in One Madison Avenue.

Other tenants include luxury retailer LVMH, private equity firm Reverence Capital Partners, financial services firm E.F. Hutton and private equity firm Crestview Partners.

Mark Hallum can be reached at mhallum@commercialobserver.com.