News Corp Building Sees 42 Percent Value Drop

Managing a billion-dollar property can come with some snags. 

That’s the case at 1211 Sixth Avenue, where the valuation has fallen 42 percent since 2015. The property was most recently appraised at $1.19 billion — south of the $2 billion it was at a decade ago, per Morningstar Credit. 

The new valuation follows the property’s loan being sent to special servicing and then modified. Cash flow is down at the building but investors say tenant improvements are coming. 

The property, a 44-story office building between West 47th and 48th streets, is better known as the News Corp building, since it’s home to the Fox News studios, as well as the offices for News Corp publications the Wall Street Journal and New York Post.

Beacon Capital Partners purchased 1211 Sixth Avenue in 2006 for more than $1.5 billion, the New York Times reported. Quebecois firm Ivanhoé Cambridge (now called La Caisse) then bought a 49 percent stake in 2013 before purchasing the entirety of the property three years later, for a total value of $1.8 billion. 

However, conditions at the office building have not kept up the momentum since then. Though revenue improved nominally, it declined in real terms. Last year, revenue was about $170 million, down from an inflation-adjusted $187 million in 2015, according to Morningstar Credit.

Law firm Ropes & Gray, which occupies about 17 percent of the space, announced it would be relocating ahead of its 2027 lease expiration. 

Developer RXR bought a 49 percent stake in the Midtown building this past January. The property’s loan, with $1.04 million outstanding, was transferred to special servicing in May ahead of an August maturity date. But by the end of the summer, the lender agreed to a three-year extension and modification.

Earlier this month, RXR secured a $1.45 billion recapitalization of the property. About $367 million is expected to go to improving the tenant experience, leasing commissions and finding a new renter for the space Ropes & Gray occupies. 

RXR and La Caisse did not respond to requests for comment. 

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