NEW YORK CITY-Just a few weeks after acquiring 75 Rockefeller Plaza, RXR Realty is continuing its Manhattan acquisition streak, joining in a contract with Walton Street Capital to acquire 237 Park Ave. from Lehman Brothers Holdings Inc. The joint venture partners did not say how much they’re paying for the 1.2-million-square-foot office property; citing real estate executives familiar with the deal, the Wall Street Journal said the sales price is more than $800 million, including the assumption of more than $420 million in debt. A spokeswoman for RXR did not respond to requests for comment by deadline Tuesday.
RXR plans extensive renovations to the 21-story property, which is about 20% vacant and faces several lease expirations in the next few years. “This building needs a full upgrade, so it’s going to get it,” RXR chairman and CEO Scott Rechler told the WSJ.
Plans include newly constructed entrances from Park Avenue and 45th Street, a new lobby and redesigned atrium, new elevator cabs and enhanced retail on the first two levels, according to a release. A new glass curtain wall enclosure on the building’s two top floors, which will allow for floor-to-ceiling windows, is also planned.
When it closes, the RXR/Walton Street acquisition will mark the fourth change of ownership for 237 Park in the past decade. Monday Properties, then known as Max Capital, acquired it for $455 million in 2003 from Oak Hill Strategic Partners LP, and then sold it in 2007 to Broadway Partners for $1.2 billion. Lehman Brothers, which held much of the debt on the property, took control of it in 2011.
The 237 Park acquisition will bring Long Island-based RXR’s New York City portfolio to more than seven million square feet, “and rounds out the product type that we have to offer to all types of tenants,” William Elder, EVP and managing director, NYC for RXR, says in a release. “We now have the ability to focus on high-end technology, service and financial companies looking for space in excess of 60,000 to 120,000 square feet in the heart of Midtown.”