MassMutual files $315M pre-foreclosure at RXR’s 340 Madison

Lender MassMutual, through the entity Massachusetts Mutual Life Insurance Company, filed a $315 million pre-foreclosure action on May 17, 2024, against RXR Realty and its partners which own the 22-story, 745,312-square-foot office building at 340 Madison Avenue, in the Grand Central neighborhood in Manhattan. The case was filed in the Southern District of New York in Manhattan. The building spans the entire block front of Madison Avenue between 43rd and 44th streets.

Federal court 1:24-cv-03865 LINK

State court summons LINK

The case is the latest example of large office and retail building owners hit hard by the decline in commercial property values for certain assets. Despite the headwinds, RXR Realty has signed recent large loans, including at 1285 Avenue of the Americas, and at the Helmsley Building at 230 Park Avenue. In addition, RXR has signed leases at the building this year, including with Yaupon Capital Management, the Commercial Observer reported last month, joining tenants including Carlyle Group.

In 2011, Scott Rechler’s RXR Realty along with USAA Real Estate (now known as Affinius Capital) led a purchase and recapitalization of the building, valued at about $570 million, buying control of the property from the prior owner Broadway Partners, which remained in the deal.

At the same time, MassMutual provided a $315 million senior loan on July 29, 2011, with an initial maturity date of August 1, 2023. On June 26, 2023, the parties agreed to extend to the date to February 1, 2024. The loan was not repaid at that time.
On February 5, 2024, MassMutual sent a notice of default. On May 10, 2024, MassMutual sent an additional notice of default. As of the date of the pre-foreclosure filing, in addition to the $315 million principal, the accrued and unpaid note and default rate interest totaled more than $7.7 million.
The complaint states that nine firms in 2023 and 2024 filed mechanic’s liens totaling more than $1.1 million in 2023 and 2024.

Court records represent the position of one party and are not necessarily accurate or complete.

The complaint also lists a number of direct and indirect investors in the building in addition to RXR Realty, Broadway Partners, and Affinius Capital, including Ontario Pension Board, Blue Owl Capital, Jim Davidson, Fritz Wolff and NBSH Acquisition LLC, an affiliate of the Neuberger Berman Group.

The block

On this tax block, PincusCo has identified the owners of three of the nine commercial properties representing 1,554,921 square feet of the 2,259,037 square feet. The largest owners are Empire Capital Holdings, Milstein Properties and Savanna. There are no active new building construction projects on this tax block.

The surrounding

Within a 400-foot radius of 340 Madison Avenue, PincusCo identified 10 commercial real estate items of interests occurred over the past 24 months. Of those 10 items, one was in new building development. It was a new building permit issued on September 1, 2022 for a 452,134-square-foot business (B) building with 98 residential units at 520 Fifth Avenue. Of those 10 items, three were sales above $5 million totaling $169.6 million. The most recent of the three was Sioni Group which bought the 79,290-square-foot, 35-unit office building (O6) on 6 East 45th Street for $26.8 million from Silk & Halpern Realty Associates on September 18, 2023. Of those 10 items, six were loans above $5 million totaling $386.5 million. The most recent of the six was Wharton Properties, Aurora Capital Associates, and ACHS Management in which borrowed $10 million from NongHyup Bank secured by the 125,632-square-foot, two-unit office building (O6) on 511 5th Avenue on April 18, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.