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RXR, SL Green to Buy 49 Percent Stake in $1.7B Worldwide Plaza

RXR, SL Green to Buy 49 Percent Stake in $1.7B Worldwide Plaza

 RXR Realty and SL Green Realty Corp. have entered into an agreement to purchase a 48.7 percent stake in Midtown West’s Worldwide Plaza from New York REIT with an agreed-upon property value of $1.7 billion, sources familiar with the transaction told Commercial Observer.

New York REIT will maintain a 50.1 percent equity interest, and George Comfort and Sons will continue to own the remaining 1.2 percent that it currently owns, sources said.

The deal on the trophy asset is expected to close in the fourth quarter. Further details regarding how the acquisition will be financed could not immediately be gleaned. 

The Real Deal first reported in July that the RXR-SL Green partnership was the front-runner to purchase the trophy asset.

Worldwide Plaza is a mixed-use building at 825 Eighth Avenue between West 49th and West 50th Streets. Its 2.1 million rentable square feet includes approximately 1.8 million square feet of office space.

Harry Macklowe owned Worldwide Plaza before defaulting on his loan and handing the asset over to lender Deutsche Bank in 2007, The Wall Street Journal reported at the time. The bank sold it two years later to George Comfort & Sons and RCG Longview for the bargain price of $600 million.  

In November 2013, New York REIT—then known as American Realty Capital New York Recovery—bought a 48.9 percent stake in the property for $220 million. The deal faced backlash from RXR at the time, which filed a lawsuit against the REIT for $200 million—alleging that RXR was promised the stake in the tower.

New York REIT marketed its almost-49 percent-stake in Worldwide Plaza in January, before choosing to exercise its equity option to buy an additional 49.9 percent stake in the property in June (bringing its equity interest up to 98.8 percent).

Both RXR and SL Green have been actively closing deals on trophy properties recently.

In July, RXR closed a $850 million refi for 237 Park Avenue. As previously reported by CO, a $477.8 million portion of the $693.2 million whole loan on the property—co-originated by Morgan Stanley (65 percent) and Société Générale (35 percent) was securitized by the lenders in the MSSG 2017-237P single-asset, single borrower commercial mortgage-backed securities deal. (A further $87.8 million in mezzanine debt is also in place on the property, with up to $69 million in future subordinate mezzanine financing permitted, bringing the total debt on the building to $850 million.)

And SL Green and Vornado Realty Trust recently closed a $1.2 billion refinancing of 280 Park Avenue, also with a securitization execution, with lenders Deutsche Bank, Goldman Sachs, Citi Real Estate Funding and Barclays Bank.

Spokeswomen for RXR and SL Green declined to comment.

Source: commercial


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