Hudson Bay Capital acquires 50% stake in RXR’s 620 Sixth condo valued at $328.7M

UPDATED, 9:05 a.m., October 18, 2024: RXR Realty and Hudson Bay Capital through the entity RXR HBC 620 Investor JV LP recapitalized RXR Realty’s office condo at 620 Sixth Avenue in the Flatiron District of Manhattan and an adjacent loading dock, valued at $328.7 million, according to city property records recorded yesterday. The tax amounts on the filing indicate Hudson Bay Capital acquired a 54 percent stake valued at $177.5 million in the property, however a spokesperson said the parties share the economic interests as 50-50 partners.
The deal closed on October 11, 2024 and was recorded on October 17, 2024. The two properties have 492,091 square feet of built space and 49,000 square feet of additional air rights according to a PincusCo analysis of city data. The sale price per built square foot is $668 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
In this transaction, RXR Realty sold a 50% stake in the 436,763-square foot retail and office condominium unit, called Unit A, at 620 Sixth Avenue, as well as a neighboring parcel that is the loading dock. PincusCo is using the city measurement for the square feet, while most reports use the 500,000 square feet figure for the condo unit, which takes into account loss factor.
The union 32BJ SEIU owns four commercial condo units, B-1, B-2, B-3, B-4 totaling 192,374 square feet throughout the building but concentrated on the fourth, fifth and sixth floors, and that space is not part of this transaction.

The Commercial Observer yesterday reported Hudson Bay Capital partnered with RXR in the recapitalization, reporting it is a 50-50 split, and at the same time they obtained a $320 million loan. City records as of yesterday do not reflect a $320 million loan. What is in property records is Blackstone Group through the entity Parlex Finco 6 LLC assumed the entire original principal loan of $421.5 million that Goldman Sachs gave in 2019 to refinance and renovate the building.

Last month, Commercial Observer reported 32BJ leased additional space in the RXR portion of the building, while Cole Haan renewed a lease.
A spokesperson for RXR said he was not authorized to discuss the transaction and declined to comment.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer RXR Realty had purchased any other properties and sold one property in one transaction for a total of $320 million over the past 24 months.

The property

The office condo in MANHATTAN has 492,091 square feet of built space and 49,000 square feet of additional air rights according to a PincusCo analysis of city data. The parcel has a total lot size of 492,091 square feet. The city-designated market value for the property in 2022 is $157.6 million. The most recent loan totaled $421.5 million and was provided by Goldman Sachs on October 8, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have not received any significant violations in the last year.

Development

For the tax lot buildings, one out of the two buildings received a initial certificate of occupancy in the last ten years. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On the tax block of 620 Avenue Of The Americas, PincusCo has identified the owners of four of the 11 commercial properties representing 222,008 square feet of the 476,510 square feet. The largest owner is Olnick Organization, followed by Tarsat Prop Llc and then Alfa Development.
There are no active new building construction projects on this tax block.

The majority, or 97 percent of the 476,510 square feet of built space are office buildings, with mixed-use buildings next occupying 2 percent of the space.

The seller

The PincusCo database currently indicates that RXR Realty owned at least 20 commercial properties with 676 residential units in New York City with 9,282,177 square feet and a city-determined market value of $3.1 billion. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 92 percent of the 9,282,177 square feet of built space are office properties, with D3 properties next occupying 4 percent of the space. The bulk, or 86 percent of the built space, is in Manhattan, with Brooklyn next at 11 percent of the space.

Correction: An earlier version of this post said Hudson Bay Capital acquired a 54 percent stake in the joint venture, based on the tax amount, but a spokesperson for the company said in fact the parties each had a 50 percent stake.

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