RXR, Blackstone sign $900M modification to 2018 Starrett-Lehigh loan

RXR Realty and Blackstone Group through the entity RXR SL Owner LLC as borrower signed a loan modification with a group of lenders led by Morgan Stanley including Deutsche Pfandbriefbank, Alabama One Asset Management, MetLife, Aozora Bank, Sun Life Assurance Company of Canada, Woori Bank, and Blackstone Group through the entity Mortgan Stanley Mortgage Capital Holdings LLC valued at $900 million for the office building (O6) at 601 West 26th Street in Chelsea, Manhattan, known as the Starrett-Lehigh Building.
The deal closed on December 24, 2024 and was recorded on January 3, 2025. The prior lenders were Morgan Stanley and Flagstar Bank which held debt that had an original loan amount of $900 million. The property has 1,835,150 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $490 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.)
The signatory for RXR Realty and Blackstone Group was David Frank. The signatory for Morgan Stanley, Deutsche Pfandbriefbank, Alabama One Asset Management, MetLife, Aozora Bank, Sun Life Assurance Company of Canada, Woori Bank, and Blackstone Group was Morgan Stanley’s Jane Lam. This is a modification of the original $900 million loan given in 2018 at the Starrett-Lehigh Building, which The Real Deal reported on at the time. Blackstone Group bought a 49 percent stake in six RXR buildings in 2015, including this one.

The property

The office building in Chelsea has 1,835,150 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 202 feet and is 652 feet deep with a total lot size of 124,100 square feet. The lot is irregular. The zoning is M2-4 which allows for up to 5 times floor area ratio (FAR) for manufacturing The property is in the West Chelsea Historic District. The city-designated market value for the property in 2022 is $444.7 million. The most recent loan totaled $50 million and was provided by New York Community Bank on April 6, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation and $7,435 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Chelsea, The bulk, or 35 percent of the 52.5 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 6th highest sale turnover among other neighborhoods in the city with $1.3 billion in sales volume in the last two years. For development, Chelsea has 1.7 times the average amount of major developments relative to other neighborhoods and is the 20th highest in Manhattan. It had 1.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owner of the one commercial property that spans that spans 1,835,150 square feet on the block.The identified owner is RXR Realty.
There are no active new building construction projects on this tax block.

All properties are office.

The borrower

The PincusCo database currently indicates that Blackstone Group owned at least 44 commercial properties with 14,226 residential units in New York City with 17,042,273 square feet and a city-determined market value of $3.2 billion. (Market value is typically about 50% of actual value.) The portfolio has $2.2 billion in debt, with top three lenders as Morgan Stanley, NYC Housing Development Corporation, and Wells Fargo respectively. Within the portfolio, the bulk, or 90 percent of the 17,042,273 square feet of built space are elevator properties, with office properties next occupying 3 percent of the space. The bulk, or 84 percent of the built space, is in Manhattan, with Queens next at 12 percent of the space.
The PincusCo database currently indicates that RXR Realty owned at least 22 commercial properties with 1,000 residential units in New York City with 9,625,887 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 89 percent of the 9,625,887 square feet of built space are office properties, with D3 properties next occupying 4 percent of the space. The bulk, or 83 percent of the built space, is in Manhattan, with Brooklyn next at 14 percent of the space.

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