Rudin Nears $350M Recapitalization for 845 Third Avenue’s Next Chapter

As Thanksgiving Day approaches, some of New York City’s most active developers and financiers are busy talking turkey. 

Rudin is close to sealing a $350 million total recapitalization for 845 Third Avenue‘s next chapter, sources familiar with the transaction told Commercial Observer. 

That includes Quantum Pacific paying roughly $80 million for a stake in the property — first reported by Pincus Co. last week — plus a roughly $250 million construction loan from BDT & MSD Partners, which is now close to closing, sources said. 

In September, Rudin filed plans with the New York City Department of Buildings to convert the 21-story office building into roughly 410 residential units, with apartments on the second through 21st floors plus roughly 9,000 square feet of retail at the building’s base. The residential portion will include amenities such as a party room, a gym, a sauna, a plunge pool and a media room, according to the plans. 

The financing was marketed as a residential conversion financing opportunity, with $222 million initially being sought, according to an offering memorandum viewed by CO. Roughly 25 percent of the building’s apartments will be designated as affordable housing, using the 467-m tax abatement program. Rudin is currently working on vacating the property of office tenants, with construction slated to begin in the first quarter of 2026 and wrap in the third quarter of 2027, according to the memorandum. 

Newmark’s Adam Spies, Doug Harmon, Josh King, Adam Doneger, Marcella Fasulo and Avery Silverstein negotiated the overall capitalization, bringing in Quantum Pacific as a 75 percent equity partner, sources said, while Newmark’s Jordan Roeschlaub and Nick Scribani negotiated the debt, according to the memorandum.

Further south, Rudin is also converting its office building at 355 Lexington Avenue to residential use, as first reported by CO back in February.

As for Quantum Pacific, the firm, led by Idan Ofer, has made an, ahem, quantum leap into New York City real estate this past year. It snapped up BGO’s 101 Greenwich Street for more than $100 million in February as well as 767 Third Avenue from Sage Realty for $88 million last November. MetroLoft Management is a partner in both of those deals, as both office buildings will be converted to residential use. 

Whether we’ll all be on planes, trains or automobiles en route to our Thanksgiving get-togethers the next few days, New York’s office-to-resi conversion train shows no signs of slowing — with 4.1 million square feet of conversions logged through August alone, compared with 3.3 million square feet for all of 2024 and a paltry 1.6 million in 2023 — so it’s clear that plenty of New York City developers are firmly onboard. 

Rudin, BDT & MSD and Newmark declined to comment. 

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.