RXR Acquires Flatiron Trophy 620 Avenue of the Americas
September 19, 2011 – (New York) – RXR Realty (“RXR”), a leading real estate operating and investment company in the New York Tri-State area, is under contract to acquire a controlling interest in 620 Avenue of the Americas, a trophy 700,000-square-foot property located in the heart of Midtown’s Chelsea submarket.
Under the terms of the deal, an affiliate of RXR is acquiring a controlling interest in the property at a $500-million valuation, with an option to acquire the remaining interest.
The mixed-use property consists of 500,000 square feet of office space, 200,000 square feet of retail space and an additional 278,000 square feet of development rights. The property’s retail space is fully leased and is some of the most successful retail space in New York City, serving as home to Bed, Bath and Beyond’s flagship store, as well as TJ Maxx and Marshalls.
The top two floors of the building are vacant, providing the opportunity to offer 152,000 square feet of contiguous space. Substantial capital improvements are planned for the office space, which already has wide-open floor plans and ceiling heights ranging from 15 feet to 24 feet.
“620 Avenue of the Americas is the pre-eminent architectural landmark in the Chelsea sub-market,” said Scott Rechler, Chairman and CEO RXR Realty. “This investment offers us a great opportunity to buy an irreplaceable asset at a significant discount to replacement cost.”
The property fits well into RXR’s strategy, said Frank Patafio, Senior Executive Vice President and Head of Acquisitions for RXR. “RXR is investing in high-quality, well-located properties that appeal to companies seeking to employ New York’s “creative class” — one of the fastest growing segments of the New York marketplace,” Patafio said. Including the investment in 620 Avenue of the Americas, RXR has purchased or acquired interests in more than $3 billion of high-quality, Manhattan office properties in the last 18 months.
“The available office space is highly desirable for technology and creative class tenants in a market where there is a scarcity of high quality blocks of large space,” said William Elder, Executive Vice President and Managing Director, New York City for RXR. “We also anticipate realizing leasing and operational synergies between 620 Avenue of the Americas and the Starrett-Lehigh building, which RXR acquired in July.”