RXR, Farrelon $200M Recap of 75 Rockefeller Has Higher Rents in Mind

Scott Rechler’s RXR’s recent $200 million recapitalization of 75 Rockefeller Plaza has more to it than just a new cost basis. 

Sources close to the deal told CO that RXR and Farallon Capital Management — the San Francisco hedge fund that took a 49 percent stake in the 33-story, 627,000-square-foot Manhattan office tower — anticipate a mark-to-market play on the building’s leases, which are currently 15 percent below market value. The average commercial lease at 75 Rockefeller Plaza expires within six years. 

Sources told CO that while newly constructed buildings like One Vanderbilt are currently commanding the highest rents in the city, a rising tide lifts all boats, and Class A office assets like 75 Rockefeller Plaza are expected to benefit from strong office demand by quality tenants.  

75 Rockefeller Plaza currently leases to Bank of America, Merrill Lynch, American Girl, Guidehouse and Northwell Health. RXR has secured rents that exceed $100 per square foot, according to a source close to the deal.  

The Real Deal first reported news of the $200 million recapitalization Oct. 29, noting that as part of the deal Rechler restructured the property’s debt, splitting the mortgage into a primary A note and smaller B note to be paid back at a later date.

Newmark’s Adam Spies and Adam Doneger advised RXR and helped secure Farallon as the equity investor in the project. 

RXR initially secured $260 million in debt at a loan-to-value of 60 percent — giving 75 Rockefeller Plaza an assumed $433 million value — when it refinanced the property in 2022 with Bank of America and The Carlyle Group, according to TRD. 

That valuation has been slashed in half under the terms of the new debt. 

RXR and Farallon did not respond to requests for comment. 

Brian Pascus can be reached at bpascus@commercialobserver.com