Scott Rechler, CEO of RXR, has restructured the finances of 75 Rockefeller Plaza, a prominent office tower in New York City that serves as the company’s headquarters. The restructuring brings San Francisco-based hedge fund Farallon Capital Management into the property as an investor, according to sources cited by The Real Deal.
Farallon’s investment values the 33-story, 627,000-square-foot building at between $190 million and $200 million. This valuation is considerably lower than the $260 million in debt RXR placed on the property in 2022 when it refinanced with Bank of America and Carlyle Group. At that time, industry observers viewed the deal as a sign of stability during a volatile period for office real estate.
As part of the new arrangement, lenders agreed to divide the mortgage into two parts: a primary A note and a B “hope note,” which will be repaid if the building performs well. This approach reflects ongoing challenges in New York’s office market, where even recent financings are being reworked due to shifting demand and falling valuations.
Rechler described 75 Rockefeller Plaza as a “digital asset” that is currently 95 percent leased to tenants such as Merrill Lynch, American Girl, and Guidehouse. He said rental rates have reached over $100 per square foot. In his statement, Rechler emphasized confidence in select properties: “We’ve never wavered in our belief in New York City’s office market, but we’re disciplined about backing the right assets. The recapitalization of 75 Rock reflects our conviction that premier properties in world-class locations will continue to outperform.”
RXR reports this is its seventh recapitalization across nine million square feet under its “3R” strategy—resetting basis, restructuring debt, and re-tenanting space—over the past two years.
A representative for RXR declined further comment on details of the transaction. Representatives for Bank of America and Carlyle Group did not respond to requests for comment.
Newmark acted as capital advisor for RXR on this deal; Adam Spies and Adam Doneger led their team. JLL served as structuring advisor.
The new valuation marks a significant decline from previous figures: If RXR’s 2022 refinancing was based on a conservative loan-to-value ratio of 60 percent, it would have valued the property at approximately $433 million at that time—a figure now more than halved. When RXR acquired its ground lease interest in 2013, it reportedly valued the property at $500 million and invested $150 million in renovations four years later.
In recent years, major leasing plans at 75 Rockefeller Plaza have changed course. A proposed partnership with Airbnb to convert ten floors into hotel-style units was announced in 2019 but collapsed by 2020. WeWork had leased roughly half of the building but exited through bankruptcy proceedings last year.
Farallon Capital Management was founded by Tom Steyer in 1986; Steyer left day-to-day operations in 2012 to focus on climate investments after gaining prominence through merger arbitrage strategies. Farallon maintains an active real estate arm led by Avner Husen since last year; it raised a $650 million U.S.-focused opportunistic real estate fund in 2023 and recently participated in several notable acquisitions with partners Fetner Properties and MCB Real Estate.
Reflecting on earlier optimism about New York’s office sector during pandemic-era uncertainty, Dustin Stolly of Newmark said during negotiations for RXR’s prior loan: “The asset is the epitome of what lenders require in today’s capital markets: A+ sponsorship, investment-grade tenancy and a superior capital-improvement program in proximity to tremendous lifestyle amenities.”
