RXR, through its Office Recovery Fund, and Hudson Bay Capital have formed a strategic partnership to acquire and rejuvenate the iconic 620 Avenue of the Americas. Located in Manhattan's dynamic Chelsea neighborhood, this historic 500,000 square-foot property is set to undergo significant transformation. The mixed-use building boasts Class-A status with expansive ceiling heights and efficient 100,000+ square-foot floorplates, making it a prime location for both retail and office tenants.
Its architectural charm and sought-after location add to its desirability. The joint venture has secured a five-year, $320 million loan facility to facilitate this transaction. Historically, 620 Avenue of the Americas has thrived with robust leasing activities, maintaining full occupancy through hosting a high-quality tenant base. However, recent macroeconomic shifts such as changes in work and shopping habits and increased interest rates have posed challenges, leading to the bankruptcy of key tenants WeWork and Bed, Bath, and Beyond, which left over 50% vacancy.
In the last two years, RXR has successfully negotiated over 300,000 square feet in new and renewed leases with tenants including Palantir and Current, bringing the office occupancy to full capacity. The building also saw the renewal of Cole Haan's lease for over a decade and an expansion of 21,000 square feet by the long-standing 32BJ labor union. RXR remains engaged in discussions with multiple candidates to fill the remaining retail spaces, projecting full occupancy within the next six months.
This revitalization not only reflects the overwhelming demand for space but highlights that with strategic investment and operations, properties like 620 Avenue can flourish even in a challenging post-pandemic landscape. As stated by Scott Rechler, RXR's Chairman and CEO, confidence in New York City's rebound remains unwavering, and this endeavor underscores the city's resilience. Sander Gerber, CEO and CIO of Hudson Bay Capital, emphasizes that despite dislocations in real estate markets, high-quality assets accompanied by innovative capital solutions offer substantial risk-adjusted returns.
Located in a prime area with appealing attributes, 620 Avenue of the Americas is poised to succeed amid the current commercial real estate transformation, proving that aptly chosen properties can outperform expectations in a rapidly evolving world. RXR is recognized for its innovative approach as an investor and developer, with a focus on value creation through repositioning iconic sites, harnessing emerging technologies, and providing value-added lending solutions.
It manages a diverse portfolio valued at approximately $18 billion, covering 30.5 million square feet of commercial space, substantial multifamily developments, and additional projects under development. Hudson Bay Capital stands as a reputable global investment management entity, aiming to deliver exceptional returns by pinpointing and leveraging market inefficiencies while upholding strict risk management standards.
