Scott Rechler’s RXR sold its stake in a trio of Upper East Side luxury towers for about 30 percent more than it invested three years ago.
RXR offloaded its preferred equity position in One East River Place, and One and Two Sutton Place North for $339.5 million to Josh Gotlib and Meyer Orbach’s GO Residential Real Estate Investment Trust, filings on the Toronto Stock Exchange show. The sale, which closed on July 31 and was recorded in city property records last week, was first reported by PincusCo.
RXR, the Qatar Investment Authority and Macquarie Capital had invested $261 million in the portfolio in 2022, when Gotlib and Orbach’s GO Partners paid $850 million for the three apartment buildings developed by the late Sheldon Solow. Together, the buildings span more than 1.17 million square feet and hold 1,174 apartments, according to PincusCo.
The buyout closed on the same day Gotlib and Orbach took their new company, GO Residential REIT, public in Toronto. The IPO proceeds funded the purchase of RXR’s interest, according to the filing. In addition to the three Lenox Hill towers, the REIT controls a 408-unit building at 685 First Avenue and the 761-unit Copper Apartments at 626 First Avenue, once the American Copper Buildings, which Gotlib and Orbach purchased in 2022 for $837 million.
“One of the key drivers behind our recent IPO was to position our balance sheet for future acquisitions by reducing debt and extinguishing all preferred equity in our structure,” said Max Kaufman, chief operating officer of GO Residential REIT, in a statement.
For RXR, the deal marks a tidy win. The towers’ value was appraised this year at $1.17 billion, a 38 percent jump since the 2022 acquisition.
GO Residential REIT plans to raise rents to reach market-rate levels, including upgrading units, the firm announced when it went public. The firm plans to seek other paths of growth, including renting amenity spaces for additional revenue streams.
Representatives from RXR did not immediately respond to requests for comment on the sale.
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