RXR Lands $575M For 5 Times Square Conversion: The N.Y. Deal Sheet
There’s movement happening at — and underneath — 5 Times Square.
After getting the green light to move ahead with a partial residential conversion, RXR Realty, Apollo Global Management and SL Green are now several steps closer to making it happen.
The office building at 5 Times Square was decked out with a splashy amenity floor last winter, following an expensive upgrade to its trophy office space that RXR financed with a $1.2B loan — backed by $300M in sponsor equity — in 2022.
But by last August, owners were floating the 39-story building as a partial residential conversion. It was approved to be turned into 1,250 residential units, of which 313 would be permanently affordable.
RXR signed two separate loan agreements this week, both with Corebridge Institutional Investments: a $561M project loan agreement and a $13.6M security instrument. RXR, which ground-leases the 1.1M SF tower, also signed a deed Tuesday with the city for the land underneath, adding an $8M payment as part of the transaction, according to an RXR spokesperson.
TOP FINANCING DEALS
United American Land netted a $56M mortgage from Citibank for a 56K SF office building in SoHo, PincusCo reported. The loan for the 71 Spring St. office property refinances a $36M mortgage from JPMorgan Chase. United American Land has owned the property since 2004, when it paid $14.8M for the building.
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A joint venture between Carlyle Group and Stonehenge NYC signed a deal to refinance 42-20 24th St., a 391-unit residential building in Long Island City, for $158.2M, PincusCo reported. The joint venture acquired the property, which has an alternate address of 23-01 42nd Road, in 2018. Natixis provided the new debt, which retires a $179.8M loan from MetLife.
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Fortuna Realty Group scored a $52M refi from BridgeInvest for a hotel property at 525 Greenwich St. in Hudson Square, PincusCo reported. The loan replaces a $45M sum from Prime Finance. Fortuna Realty Group has owned the 60K SF building since 2011, when it paid $12.8M to acquire it.
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M&T Realty Corp. originated a $50M mortgage to refinance the Alyn, a luxury multifamily building at 152 E. 87th St., Commercial Observer reported. The borrower and owner of the 56-unit property is an affiliate of Gordon Property Group.
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Simon Kaufman took out a $70M refi loan with lender Greystone & Co. for a 151-unit apartment building at 322 Grand Concourse in Mott Haven, PincusCo reported. The property has been owned by a shell company affiliated with Kaufman since 2018. The sum replaces $63M of debt from the same lender.
TOP LEASES
The United Nations is consolidating its office space into 1 United Nations Plaza in a 425K SF deal. The deal gives the U.N. 26 stories at the building and allows it to leave its space at 2 United Nations Plaza. Both buildings are owned by state-backed agency the United Nations Development Corp., which is in the middle of a $500M capital improvement program that includes new sustainability and security features, infrastructure and lobby renovations, and new building systems. Newmark’s Jim Saunders, Jason Perla and Roy Abernathy represented the U.N., while CBRE's Scott Gottlieb represented the landlord.
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Fitness chain Life Time has signed a 52K SF lease at 425 Fifth Ave., an 865K SF Class-A office once called HSBC Tower and known as 10 Bryant. Life Time plans to offer a cold-plunge pool, a steam room, a luxury spa with red light therapy, and studios and training spaces in the 30-story tower overlooking Bryant Park. Other tenants in the building include Generate Capital, Tilden Park Capital and 17Capital. Atlantic Retail’s Joe Mastromonaco represented Life Time, and JLL’s Patrick Smith represented landlord Property & Building Corp. Ltd.
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Sky Zone has signed a 52K SF lease at a Brighton Beach warehouse at 2350 E. 69th St. for a new indoor trampoline park, according to a release. The lease for the current tenant, Match Point NYC, is expiring, and Sky Zone will take occupancy this summer. The building is one of eight NYC industrial assets owned by Turnbridge Equities after Turnbridge acquired the property last year. Turnbridge represented itself in the transaction, while Sky Zone was represented by Josh Gosin and Jordan Gosin of Newmark.
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NYC Elite Gymnastics renewed its 21K SF lease at GFP Real Estate’s 40 Worth St., the landlord announced. The Manhattan-based gymnastics program plans to stay on the building’s ground, lower mezzanine and lower level space for another 20 years. The 1929-built, 800K SF building, also known as the Merchants Square Building, is also home to nonprofit tenants including the Legal Aid Society and the Innocence Project. Roy Lapidus of GFP represented the landlord and the tenant in the deal.
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No-fee ticketing platform TickPick is doubling the size of its office in a deal to move to Vornado Realty Trust’s One Penn Plaza, according to a release. TickPick signed a 17K SF lease for its new corporate headquarters. Alec Kirschner of Vestian represented TickPick in the deal.
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Macerich signed a full-floor, 12K SF lease at The Durst Organization’s 825 Third Ave., Commercial Observer reported. The mall REIT’s 13-year lease had asking rents of $96 per SF. The deal may be a relocation for the firm, which lists its office as 500 Fifth Ave., although it is unclear when Macerich will move into the space. Tom Bow, Ashlea Aaron, Bailey Caliban and Sayo Kamara repped Durst in-house, while Gordon Ogden and James Hart of Bradford Allen repped Macerich.
TOP SALES
Trammell Crow Co. acquired a 99-year ground lease for a development site at 126 Lafayette St. in SoHo for $14.7M, The Real Deal reported. The seller was a joint venture of Carolwood and Stellar Management, which has owned the ground lease since August 2021. A neighborhood rezoning that passed a few months after Carolwood and Stellar acquired the site could allow for 27 stories and up to 115 residential units on the site. The CBRE subsidiary reportedly believes the site could fetch high enough rents to use the 485-x tax abatement, even with the $40 minimum construction wage, despite developers' claims that only smaller developments make financial sense because of the wage requirements in the new law. It is unclear if Trammell Crow is seeking to buy the fee interest in the building in addition to the ground lease.
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Terreno Realty Corp. acquired 11-40 Borden Ave., a two-story, 36K SF industrial building in Long Island City, for $16M, according to a release. The seller was Wickersham Realty LLC, which had owned the property for more than 50 years. The property is occupied by construction distribution company Distribution International. Adirondack Capital Partners’ Chad Sinsheimer repped Terreno and Wickersham in the deal.
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Ryco Capital has sold 145 Second Ave. for $20.4M, less than a year after it acquired it as part of a portfolio, Commercial Observer reported. Lockhill Properties is the new owner of the seven-story, 24-unit East Village building, which has retail space leased to Burgerhead. Ryco bought it and eight other multifamily buildings on Second Avenue for $132M last August.
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A three-story, 5K SF building at 1192 Sixth Ave. in the Diamond District has changed hands for $27M, Crain’s New York Business reported. Celebrity jeweler Avi Davidov signed the deed as the buyer, with retired boxer Floyd Mayweather Jr. claiming his company invested in the shell company that now owns the property. Painter Jo Gelbard sold the retail property, which had been in her family since the 1960s.
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A Malaysian investment company acquired the five-story office building at 540 Broadway in SoHo for $30M, PincusCo reported. The building has space for five office tenants and a ground-floor retail tenant, and it has an alternative address of 78 Crosby St. The buyer was MBf Holdings, while the seller was finance and insurance company Broadway Continental. The deal is MBf's second Manhattan purchase within a year, following its $15.6M deal in August for a mixed-use building at 958 Madison Ave. in Lenox Hill.
