Scott Rechler’s RXR has launched the Gemini Office Venture, becoming a significant player in New York City’s office market. According to Bloomberg, the venture has already completed $3.5 billion in transactions and is looking to expand further. The group of investors includes Baupost Group, King Street Capital Management, Criterion Real Estate Capital, Liberty Mutual Investments, and Abrams Capital.
Last month, RXR revealed it had expanded its credit partnership with Liberty Mutual to invest up to $1 billion in the multifamily sector.
Rechler commented on the recent activity: “The last 18- to 24 months now, we’ve been buying office, primarily from institutions that are seeking to reduce their office exposure as the markets were going through this transition.” He also noted that current market values are about half of what they were during the previous cycle.
Gemini has completed three deals in Manhattan so far. One notable transaction was the $1 billion acquisition of 590 Madison Avenue. This deal was supported by a $785 million loan from Apollo Global Management and marked the largest investment in New York City’s office market in three years.
Additionally, Gemini supported the purchase of a minority stake in a Midtown office tower. Earlier this year, RXR acquired a 49 percent stake in Ivanhoe Cambridge’s 1211 Sixth Avenue; that property is valued at $1.2 billion.
The venture also holds an interest in the Starrett-Lehigh building located in West Chelsea. Two years ago, Ralph Lauren renewed its lease for 250,000 square feet at this site.
New York City’s office market continues to attract investors who are seeking discounted opportunities and betting on economic recovery. Recently, Rithm Capital agreed to acquire Paramount Group for $1.6 billion following competitive bidding among leading Manhattan landlords (https://therealdeal.com/2024/09/10/rithm-capital-to-buy-paramount-group-for-1-6b/).
