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Sagehall Joins RXR on $180M Recap of Manhattan Office

Sagehall is teaming up with RXR Realty to help recapitalize one of the real estate investment giant's office assets in Midtown Manhattan, 530 Fifth Avenue, for $180 million, according to a report from the Commercial Observer.

The two will pour $70 million in new capital into the 475,000-square-foot asset. Also, they have grabbed a $110 million loan from ING Capital, which carries a five-year term.

The building, which is two blocks from Grand Central Terminal, features amenities including co-working spaces, a new coffee shop, health and fitness programs, and a conference center. Also, 550 Fifth offers flexible office solutions for multiple fields of work including law, hospitality, finance, and tech. Occupancy in the building sits at about 85 percent, according to CO.

Convene, a flex space provider, operates 116,000 square feet at the property, which includes the seventh, eighth, ninth, and 10 floors. In the past couple of years, the building has completed 78,000 square feet worth of leases.

“After extensively tracking office investment opportunities in New York City post-COVID, 530 Fifth presents a unique opportunity to capitalize on the recovery in the office market and the continued appeal of the Grand Central submarket for tenants,” Sush Torgalkar, co-founder of Sagehall, said.

The partnership for RXR comes after it teamed up with TF Cornerstone to propose what would be the tallest and most expensive skyscraper in the U.S. ever — located in Manhattan. Business Insider reported the plans call for a 1,575-foot-tall asset that would cost as much as $6.5 billion. The tower would feature a mixed-use setting between office and hotel. In New York, RXR operates about two dozen office properties, according to its portfolio.

New York overall continues to show resilience in office recovery since the pandemic. In fact, in Avison Young's recent fourth-quarter Manhattan property sales report, the office sector stood out with 13 transactions for sales of $1.6 billion, which surged 86 percent and 98 percent from the previous three months, respectively.

Reprinted with permission from the Tuesday, 21 January 2025 21:15:06 EST online edition of GlobeSt © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.