RXR Closes in on $1 Billion Deal for Madison Avenue Office

[ad_1] Scott Rechler’s RXR has finalized a major deal to amass the Plaza District skyscraper at 590 Madison Ave. by inserting a $50 million deposit. Roughly 3.5 weeks prior, the corporate signed a letter of intent to buy the constructing from the STRS Ohio state academics’ pension fund for almost $1.1 billion.

This acquisition marks a notable milestone as the primary New York Metropolis workplace sale to exceed the $1 billion threshold since Google’s $2.1 billion buy of its Hudson Sq. headquarters in 2022.

590 Madison Avenue in Manhattan, picture courtesy of CommercialEdge

Upon closing, Rechler will lastly safe a property that he has lengthy pursued: RXR had beforehand submitted a proposal to purchase the previous IBM constructing, though the exact timing of that prior bid stays unclear. This earlier try might have coincided with STRS Ohio’s preliminary providing of the 1-million-square-foot tower on the market in 2018 or final 12 months, when RXR made an unsolicited supply.

Regardless, 590 Madison Ave. has persistently garnered vital curiosity, largely attributable to its standing as one of many restricted variety of trophy workplace properties within the Plaza District. Outstanding traders — equivalent to Tishman Speyer, Blackstone Group, SL Inexperienced and RFR — had been reportedly all concerned late within the bidding course of.

Nonetheless, the asking value gave potential consumers some reservations, and a number of other steered buying the constructing via installments. In the long run, the extraordinary competitors for the property led to an settlement for a full sale. The following step for RXR towards finalizing the acquisition is the signing of the contract. The deal is formally slated to shut by July 30, though one supply signifies that it'll doubtless shut someday in mid-July.

An Eastdil Secured workforce headed by Will Silverman and Gary Phillips brokered the deal.

A spokesperson for RXR declined to remark, and a consultant for STRS Ohio didn't instantly reply to inquiries.

RXR’s relationship with the pension fund extends past this deal: STRS Ohio can also be Rechler’s accomplice on his Amazon-leased warehouse situated in Maspeth, Queens, at 55-15 Grand Ave., which RXR acquired in 2018. Earlier this 12 months, RXR additionally obtained a 49% stake in Ivanhoé Cambridge’s 1211 Sixth Ave. workplace tower.

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