RXR Realty, a leading real estate operating and investment company in the New York Tri-State area, announced completion of its acquisition of the Starrett-Lehigh Building. RXR paid approximately $920 million, or approximately $400 per square foot, for the 19-story, 2.3 million square foot property.
Built in 1932 and renovated in 2001, the iconic Starrett-Lehigh Building is one of Manhattan’s top ten largest office buildings and occupies the entire square block bounded by West 26th and West 27th Streets between 11th and 12th Avenues. A $30 million capital program to renovate the building’s infrastructure was recently completed. RXR plans to invest an additional $50 million to further position Starrett-Lehigh as one of Manhattan’s leading properties serving New York’s fast-growing “creative class” workforce.
High-profile tenants include Tommy Hilfiger, Martha Stewart-Omnimedia, advertising firm Dentsu McGarry Bowen, Hugo Boss and Ralph Lauren/Polo. Starrett-Lehigh’s appeal is evidenced by a 93 percent current occupancy rate. Average occupancy at the property has exceeded 90 percent over the past 10 years and 96 percent over the last five years.
Located in the heart of the Chelsea West neighborhood, Starrett-Lehigh is uniquely positioned to benefit from the revolutionary changes taking place in the area such as the recent opening of the new 26th Street entrance to the High Line, the enormous infrastructure investments being made in the development of the nearby Hudson Yards and the extension of the number 7 subway line into the community.
“The Starrett-Lehigh acquisition represents an opportunity for us to acquire an irreplaceable building at a substantial discount to replacement cost,” said Scott Rechler, Chairman and CEO of RXR. “We are extremely excited to have the opportunity to bring this extraordinary building to an even higher level of excellence.”
“We see the property as a destination for innovative companies and well positioned to benefit from transformative developments in the immediate area,” said William Elder, Executive Vice President and Managing Director, New York City for RXR. “The Starrett-Lehigh Building is one of Manhattan’s leading properties for the City’s creative professionals. Its unique character is a perfect fit for tenants in the technology, media, high-end fashion and advertising industries, providing them with open floor plates, high ceilings, sweeping views of the Hudson River and a robust building infrastructure.”
Published: December 14, 2011
Filed Under: Acquisition
The RXR platform manages 72 commercial real estate properties and investments with an aggregate gross asset value of approximately $17.7 billion, comprising approximately 23.1 million square feet of commercial operating properties and approximately 6,300 multi-family and for sale units in various stages of development in the New York Metropolitan area. Gross asset value compiled by RXR Realty in accordance with company fair value measurement policy and is comprised of capital invested by RXR and its partners, as well as leverage.