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CMA
June 07, 2019  

Blackstone, RXR Shop for Loan on NY Condo

A joint venture between Blackstone and RXR Realty is seeking to borrow about $425 million to refinance part of a fully leased office/retail building in Midtown Manhattan.

The seven-story building, at 620 Avenue of the Americas in the Chelsea submarket, encompasses roughly 540,000 square feet of offices and 200,000 sf of retail space. The Blackstone team’s condominium interest comprises some 300,000 sf of the offices and all the retail space. The remaining block of offices, roughly 240,000 sf, is owned by SEIU 32BJ, the nation’s largest union for building workers.

The loan request is for a five-year floater, including a future-funding commitment of about $90 million. The package might include subordinate debt.

Lenders haven’t been told a loan-to-value ratio, but the leverage is being described as low. Eastdil Secured is pitching the assignment for Blackstone and RXR, a Uniondale, N.Y., shop led by investor Scott Rechler.

RXR bought the seven-story building for roughly $500 million in two steps, in 2011 and 2012. It sold a 50% stake to Blackstone in 2015 as part of a larger transaction. The following year, SEIU 32BJ, then a tenant, exercised an option to buy its space for $143.9 million.

Last week, the New York Post reported that co-working giant WeWork had signed a 212,000-sf lease with Blackstone and RXR. That space was vacated by Spotify and Mediaocean.

The retail space has an atrium entrance facing Sixth Avenue, a busy shopping corridor. The retail tenants are Bed, Bath & Beyond (which occupies roughly 100,000 sf), TJ Maxx (68,000 sf until 2030) and Marshalls (38,000 sf until 2030).

The landmarked building stretches from West 18th Street to West 19th Streets on the east side of Sixth Avenue. It was built in 1896 as the Siegel Cooper Dry Goods department store and has had some $46 million of capital improvements over the past 18 years.

RXR bought the Beaux Arts building from Joseph Chetrit and Yair Levy, both local investors, and Bonjour Capital of New York. That partnership had acquired it in 2005 from Atlanta-based Jamestown for $290 million.

Blackstone gained its interest when it bought a 50% interest in six properties from RXR. That transaction valued the 5.3 million-sf portfolio at $4 billion. Four other properties are in Manhattan, and one is in Princeton, N.J.