Morgan Stanely and NYCB provided the debt
Scott Rechler’s RXR Realty has secured $900 million from Morgan Stanley and New York Community Bank to refinance the Starrett-Lehigh Building. The 2.3 million SF office property is located at 601 West 26th Street and spans an entire block between 11th and 12th Avenues.
Financing Breakdown: The new mortgage acts as a transitional loan, paying down $525 million in previous debt on the property. Of the $900 million loan, $150 million is structured as a facility earn out, which will be triggered when an unidentified office tenant signs their lease.
Worth Noting: 250,000 SF of new leases have been signed, which will increase the property’s occupancy from 76 percent to 90 percent. The firm is also redeveloping and leasing the ground-floor retail space, which should be completed in 2019.
Flashback: RXR paid $920 million for the property in 2011. The firm subsequently invested an additional $50 million in capital improvements to upgrade the property. In February 2015, RXR sold a 49 percent stake to the Blackstone Group.