RXR Secures $475M From Apollo, JP Morgan to Convert 61 Broadway to Housing

Scott Rechler’s RXR continues to reinvent its stock of older office assets. 

RXR, together with One Investment Management, has secured $475 million in tax equity and construction debt to finance the office-to-residential conversion of 61 Broadway, a 33-story downtown New York City office building that had recently been in distress, into a 796-unit residential tower. 

Apollo Global Management provided $420 million of construction debt, while J.P. Morgan Chase provided a $55 million tax equity investment. 

Aside from the pre-war building being eligible for state and federal historic tax credits, the conversion of 61 Broadway will use New York’s 467-m office-to-residential tax abatement program, ensuring that 25 percent of it, or 200 units, will be affordable. 

Construction will begin in March 2026, with the first apartments expected to be delivered in early 2028. 

“61 Broadway demonstrates what can be achieved when thoughtful public policy meets private-sector expertise,” said Rechler, chairman and CEO of RXR. 

Known as the Adams Express Building, 61 Broadway was built in 1914, well before an era of amenities or even modern elevators. RXR purchased the property from Broad Street Development in 2014 for $330 million and quickly moved to create larger floor plates and fill the building with tenants from media, technology and financial services. 

Rechler and RXR sold a 49 percent ownership stake in the property to China Orient Asset Management in 2016 at a valuation of $440 million. RXR and China Orient financed the deal through $320 million in debt and a $240 million syndicate loan led by Aareal Bank, a German lender with more than $40 billion in assets under management. 

The building was 91 percent occupied following its 2014 purchase, according to RXR, but was hit hard by COVID-19-era office occupancy metrics beginning in 2020. The building lost a major tenant in 2021 when Knotel — which had occupied four floors and 60,300 square feet — filed for bankruptcy in January of that year.

CO reported in May 2023 that Rechler entered maturity default with the 33-story office tower after defaulting on a $240 million loan that matured May 1. Now he’s back in with new money and a new vision. 

RXR is also redeveloping 5 Times Square, a 1.1 million-square-foot office building in Midtown, into a residential complex with as many as 1,200 units.

“RXR is uniquely positioned to execute complex office-to-residential conversions, leveraging our integrated platform, capital relationships and development experience to reposition office buildings into high-quality, mixed-income housing that strengthens the city for the long term,” said Rechler

Brian Pascus can be reached at bpascus@commercialobserver.com.