Rudin Recapitalizing 845 Third Ave With $350M Financing

Rudin’s Midtown East conversion is getting a shot in the arm, courtesy of both a construction loan and the arrival of an equity partner.

The developer is nearing a $350 million recapitalization of 845 Third Avenue, the Commercial Observer reported. The financing will aid the conversion process, for which Rudin filed plans with the city a couple of months ago.

BDT & MSD Partners are set to provide a $250 million construction loan to Rudin. Newmark’s Jordan Roeschlaub and Nick Scribani negotiated the loan.

Additionally, Idan Ofer’s Quantum Pacific paid $80 million for a stake in the project, first reported by PincusCo, making the company a 75 percent equity partner. Overall, the recapitalization is well above the $222 million Rudin was seeking in financing, according to an offering memorandum.

A Newmark team including Adam Spies, Doug Harmon and Josh King arranged the recapitalization. All of the parties involved in the transaction declined to comment to the Observer.

Rudin filed plans in September to turn the 21-story Manhattan office into a 411-unit apartment building. There will also be 9,100 square feet of retail space on the ground floor and residential amenities like a party room, a gym, a spa, a sauna, a plunge pool, media rooms and coworking spaces.

The conversion is expected to cost approximately $41.7 million. It’s also expected to utilize the 467m tax abatement program, meaning 25 percent of the units would be set aside as affordable housing.

Construction is expected to begin in the first quarter once Rudin clears the office tenants from the property. Work is expected to wrap in the third quarter of 2027.

The conversion has been on tap for years. As of early last year, the 1963-built property had more than 100,000 square feet of available space and hadn’t seen a lease signed in nearly 24 months. 

The firm didn’t immediately pursue its conversion plan because the project didn’t pencil out, but the math changed with the City of Yes rezoning, which allowed for added floors.

— Holden Walter-Warner

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