RXR Secures $1.3B Refi for 5 Times Square

Morgan Stanley, Apollo and AIG back debt package for renovation of NYC tower.

RXR and its partners have landed a $1.3B debt package from a trio of lenders for 5 Times Square, a 39-story tower the owner is planning to renovate. Morgan Stanley, Apollo and AIG backed the refinancing, a short-term loan that runs through May 2026.

As part of the debt restructuring, SL Green converted its $139M mezzanine loan on the Times Square tower into equity, joining the development as a partner.

RXR is investing $300M to renovate 5 Times Square so the building can compete with newer buildings for tenants in the flight to quality in the office market. The infusion of capital also will be used to finance incentives including leasing commissions.

The tower lost its anchor tenant, Ernst & Young, last year when the accounting firm relocated to a new skyscraper on Manhattan’s West Side. In January, RXR signed a long-term lease with streaming giant Roku to occupy 240K SF at 5 Times Square, the top eight floors of the building.

Roku is relocating from a 70K space in a building on 41st Street. The deal will put the media company’s name on a 22-story vertical neon sign that runs along the side of the Times Square tower.

Improvements planned for the tower include a new lobby, elevators, a golf simulator, a fitness facility and event spaces.

RXR has been busy arranging new debt packages for its NYC buildings in recent weeks. Last week, the firm secured a $260M refinancing for 75 Rockefeller Plaza from a group of lenders including Bank of America and Carlyle Group.

Lenders have become more cautious of office loans as some office tenants retreat on their office footprints to embrace hybrid work patterns. Buildings that are under renovation or are planning to use capital from new debt packages to renovate are in a better position to secure refinancing, experts say.

Newmark, which arranged the refinancing of 75 Rockefeller Center, listed in a statement the key criteria that lenders are requiring it in the current market environment—which it says is the Rock Center tower “epitomizes.”

“The asset is the epitome of what lenders require in today’s capital markets: A+ sponsorship, investment-grade tenancy and a superior capital-improvement program in proximity to tremendous lifestyle amenities.

In 2017, RXR invested $150M to renovate 75 Rock, installing new windows and refurbishing the lobby in the landmark tower, which opened in 1947. Tenants at the 627K SF building include Bank of America and WeWork.