NEW YORK CITY-Continuing its push into Manhattan, Long Island-based RXR Realty said Thursday it had acquired a 99-year triple-net lease for 75 Rockefeller Plaza with an eye toward repositioning the 630,000-square-foot office tower. Financial terms were not disclosed.
An RXR spokesman declined to comment on terms of the deal. Published reports last fall said bidding on a leasehold of the 33-story tower had reached about $17 million per year as RXR became the front runner, an amount that would put the value of the deal at north of $1.5 billion over the course of the lease.
In a release, RXR says 75 Rockefeller is expected to be delivered completely vacant, including retail, in the summer of 2014, at which point the company will launch into redeveloping and repositioning the asset. A completion date of third-quarter 2015 is anticipated.
“We are honored to have the opportunity to create a modern classic asset at 75 Rockefeller Plaza,” Scott Rechler, RXR’s chairman and CEO, says in a statement. “We fully appreciate the historic attributes of the building and neighborhood, but with that in mind, we also are very excited about our opportunity to completely modernize everything inside the building. When renovations are complete it will be the newest, most advanced, LEED-certified building in all of Rockefeller Center.” It will also be tantamount to the first new construction there since the property was new; RXR’s spokesman declined comment on a Bloomberg report that the renovations would cost more than $100 million.
A Cushman & Wakefield team represented 75 Rock’s ownership, 75 Plaza LLC, in the deal. The owner behind the LLC is reportedly Egyptian billionaire Mohamed Al Fayed.
C&W’s team included Bruce Mosler, chairman of global brokerage; Michael Rotchford, EVP and head of corporate finance & investment banking; Louis Wolfowitz, executive director, corporate finance & investment banking; and Helen Hwang, EVP, investment sales. The team also included Arthur Mirante, now principal and tri-state president of Avison Young and formerly president of global client development at C&W. Shearman & Sterling LLP provided legal advice to 75 Plaza LLC.
The 66-year-old office property has been net leased to Time Warner Corp. since 1993. The property’s ownership initially retained C&W as exclusive leasing agent to re-lease it when TWC’s lease expires in 2014.
“We immediately recognized the historic importance of this building and the value of its location,” Mosler says in a release. “After examining the marketplace, we recommended to ownership that its highest value could be achieved by bringing in a high-quality operating partner.”
Originally built in 1947, 75 Rockefeller is the newest tower at Rockefeller Center. It was built for the Standard Oil Co., which had run out of space at its existing Rock Center offices, and was originally known as the Esso Building. At the time, it was the tallest air-conditioned building in the city.
The leasehold at 75 Rockefeller brings Uniondale, NY-based RXR’s Manhattan portfolio to 6.5 million square feet. It already controls 450 Lexington Ave., 340 Madison Ave., 1166 and 1330 Ave. of the Americas in Midtown; and 620 Ave. of the Americas and the behemoth Starrett-Lehigh Building at 601 W. 26th St. in Midtown South.