Search
 

RXR Acquires Stake in Madison Avenue Tower

NEW YORK CITY-The owner/developer is buying a 49% interest in 340 Madison, in a change from earlier reports that an outright $570-million sale was imminent.

By Paul Bubny | Updated on May 25, 2010

NEW YORK CITY-Confirming rumors that have circulated for two months, RXR Realty said late Monday afternoon it’s under contract to acquire a 49% interest in the 739,000-square-foot office tower at 340 Madison Ave. Based on a $570-million property valuation, RXR is paying $279.3 million for the stake, its first direct property investment in Manhattan since its formation in 2007.

A spokesman for RXR tells GlobeSt.com that the deal as announced this week differs from earlier published reports that said the Uniondale, NY-based owner/developer would acquire 340 Madison outright in phases from its current ownership, a joint venture of Broadway Partners and the D.E. Shaw group. As it’s now structured, the deal calls for Broadway to retain a 51% interest in the property. RXR will lead the recapitalization on behalf of the RXR/Broadway venture, as well as the refinancing of the existing $400-million first mortgage debt with ING Real Estate Finance.

RXR will utilize capacity from its balance sheet and recently raised real estate opportunity fund to acquire the interest, according to a release. “By structuring this transaction in a creative manner, it allowed us to underwrite more attractive returns than could otherwise be expected from an outright purchase of the property,” RXR CEO Scott Rechler says in the release.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.