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CMA
February 08, 2019  

RXR Aiming to Refinance Tower in Lower NY

RXR Realty is seeking to arrange up to $400 million of debt to refinance its leasehold interest in the office building at 32 Old Slip in Lower Manhattan.

The Uniondale, N.Y., investment shop prefers a floating-rate loan with a term of 5-7 years. The debt might be divided into senior and mezzanine components. Newmark is pitching the assignment.

RXR acquired the 1.1 million-square-foot building and the underlying ground from Beacon Capital in 2015 for $675 million. RXR immediately flipped the ground to a partnership between investor David Werner and Melohn Properties, both of New York, for $197.5 million and signed a 99-year ground lease. Werner and Melohn financed the land purchase with a $176 million fixed-rate loan, with a 10-year term, from Morgan Stanley.

RXR financed the leasehold interest with a $300 million floating-rate mortgage from GE Capital. Later in 2015, GE sold that loan and 45 others to Deutsche Bank after deciding to wind down its real estate investment operation. The 32 Old Slip mortgage was the largest individual loan in that pool. RXR would retire it with most of the proceeds from the new loan.

The building’s occupancy rate couldn’t be learned. Law firm Cahill Gordon signed a 10-year lease on 202,000 sf a few months ago. Other occupants include Alliant Insurance Services, Daiwa Securities and Tradition Financial Services.

The 36-story building, also known as One Financial Square, was constructed in 1987. Beacon, a Boston fund operator, acquired it and the underlying land in 2007 from Paramount Group of New York for $751 million. The property suffered severe damage from Hurricane Sandy in late 2012. Beacon then undertook a major renovation that included improved flood barriers.

The property is along the East River, roughly equidistant between South Street Seaport to the north and Battery Park to the south. It’s on a block bounded by Old Slip, Front Street, Gouverneur Lane and South Street.