The power players behind the office-to-residential conversion of 5 Times Square landed a massive financing package to advance the project.
Corebridge Institutional Investments provided a $561 million loan to Scott Rechler’s RXR, Marc Holliday’s SL Green and Marc Rowan’s Apollo Global Management for the project, Bisnow reported. RXR directly signed the deals with Corebridge, which also included a $13.6 million security instrument.
In addition, RXR signed a deed with the city to pay $8 million for the ground underneath the development. Previously, the firm operated under a ground lease for the property.
With all of that out of the way, the ownership group should have a path towards making the lofty conversion a redevelopment of reality.
The three companies are planning to convert the 38-story office building into up to 1,250 units of housing, mostly studios, of which 25 percent would be affordable.
The project is expected to get 467m, a property tax break earmarked for office-to-residential conversions where at least 25 percent of units are designated affordable. This project would be eligible for a 90 percent exemption for 35 years if construction begins before June 2026; it’s expected to begin by the end of this year, according to Multi-Housing News.
Roughly 918,000 square feet of office space is expected to be transformed into housing, while 37,000 square feet of retail space will remain in place. Also remaining in place — at least for the time being — is Roku, which has an office lease that does not expire until 2033. Shortly after signing for 240,000 square feet, however, the company downsized and decided to sublease its space.
The project’s first phase is expected to be completed in 2027.
There’s no shortage of office-to-residential conversions to track in Manhattan. In the spring, for instance, the Feil Organization and its joint venture partners BLDG and the Nakash Family launched the conversion of the 14-story, 85,000-square-foot office building at 140 West 57th Street into 47 luxury condos. Deutsche Bank provided a $65 million construction loan for the project.Â
— Holden Walter-Warner
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The Daily Dirt: 5 Times Square could transform into 1,000-plus apartments
Feil finally kicks off Billionaires’ Row office-to-resi conversion
Roku seeks sublet at RXR’s 5 Times Square
