Scott Rechler’s RXR is emerging as arguably the biggest wheeler-and-dealer of New York City office space, unveiling its latest venture this week.
RXR is the majority owner of the Gemini Office Venture, which has already closed on $3.5 billion worth of transactions in New York City, Bloomberg reported. The venture is setting its sights on more deals and counts powerful backers among the ranks.
Investors in the venture include Baupost Group, King Street Capital Management, Criterion Real Estate Capital, Liberty Mutual Investments and Abrams Capital. Last month, RXR announced an expanded credit partnership with Liberty Mutual to deploy up to $1 billion in the multifamily market.
“The last 18- to 24 months now, we’ve been buying office, primarily from institutions that are seeking to reduce their office exposure as the markets were going through this transition,” Rechler said in a statement. He added that the market values compared to the last cycle were at roughly 50 percent discounts.
Gemini’s already made three deals in Manhattan, including one of the largest office deals in New York City in years.
Last month, RXR closed on the $1 billion acquisition of 590 Madison Avenue, pulling in a $785 million loan from Apollo Global Management to close the sale of the Plaza District office building from the State Teachers Retirement System of Ohio. It was the city’s largest investment deal in three years.
Gemini, which owns 49 to 51 percent of the buildings in its portfolio, also backed the acquisition of a minority stake of a Midtown office tower. At the start of the year, RXR bought a 49 percent stake in Ivanhoe Cambridge’s 1211 Sixth Avenue, a property valued at $1.2 billion.
Gemini also has a stake in the Starrett-Lehigh building in West Chelsea, where Ralph Lauren renewed 250,000 square feet two years ago.
New York City’s office market is piquing investors looking to snap up deals at discounts and bank on the city’s recovery. Rithm Capital recently agreed to purchase Paramount Group for $1.6 billion, a bidding process that featured a who’s who of Manhattan office landlords.
— Holden Walter-Warner
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Rechler closes $1B deal for 590 Madison with Apollo private equity loan
RXR buys stake in Ivanhoe Cambridge’s 1211 Sixth Ave, Fox News HQ
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