RXR Realty working to lend over $500M on new construction

As banks retreat from space, Rechler's investment firm sees opportunity

TRD New York /
Feb.February 24, 2016 05:00 PM

As banks increasingly shy away from lending on new residential construction projects, RXR Realty is moving in the opposite direction.

The Scott Rechler-led real estate investment firm is currently working on issuing more than $500 million in mezzanine construction loans and is also looking to lend on asset recapitalizations, Rechler told The Real Deal.

Lending on this scale is new turf for RXR, a firm primarily known as a buyer of commercial properties in Manhattan and the New York metropolitan area.

The rationale behind the move: though some banks are retreating from construction lending amid stricter regulations and market volatility, developers still need financing, which opens up opportunities for players like RXR.

“When there’s volatility you want to decouple yourself from broader market trends to try and find investments where you can capitalize on the impact of that volatility,” Rechler said, explaining his against-the-current strategy. Although RXR has not previously been a lender of note, Reckson Associates, the company Rechler headed until it was bought by SL Green Realty in 2007, was an active lender.

RXR is looking to lend on residential construction, but Rechler said it will shy away from ultra high-end condos amid signs that the luxury market has softened.

Crain’s first reported in June that RXR plans to become a real estate mezzanine lender, without specifying the types of assets and deals it would lend on.

RXR has bought roughly $8.6 billion worth of Manhattan real estate over the past five years, according to Real Capital Analytics. In December, the firm signed a contract to buy office tower 1285 Sixth Avenue for $1.7 billion.


Related Articles

arrow_forward_ios
237 Park Avenue and Scott Rechler (Photos via Getty; RXR)

What tenants are paying at RXR and Walton Street Capital’s 237 Park Avenue

What tenants are paying at RXR and Walton Street Capital’s 237 Park Avenue
RXR's Scott Rechler and a rendering of 55-15 Grand Avenue (Getty, RXR Realty)

Amazon’s future Queens warehouse, Robert DeNiro’s film studio among top NYC projects

Amazon’s future Queens warehouse, Robert DeNiro’s film studio among top NYC projects
Airbnb’s Brian Chesky, RXR Realty’s Scott Rechler and 75 Rockefeller Plaza (Credit: Rechler by Eugene Gologursky/Getty Images, 75 Rockefeller)

Airbnb and RXR nix resi conversion deal at 75 Rock

Airbnb and RXR nix resi conversion deal at 75 Rock
RXR Realty's Scott Rechler and 2413 Third Avenue in the Bronx (Credit: Getty Images; Google Maps)

RXR planning 200-unit South Bronx project

RXR planning 200-unit South Bronx project
James Whelan, Scott Rechler and Jonathan Gray (Credit: Rechler by Eugene Gologursky/Getty Images; Whelan by Axel Dupeux; Gray by Drew Angerer/Getty Images; CDC)

With New York in crisis, real estate pitches in

With New York in crisis, real estate pitches in
A photo illustration of Scott Rechler and the SS United States (Credit: Eugene Gologursky/Getty Images for National Eating Disorder Association, Brian W. Schaller via Wikipedia)

RXR is looking for space…to park a $500M ocean liner

RXR is looking for space…to park a $500M ocean liner
Colony Capital's Tom Barrack and RXR Realty's Scott Rechler (Credit: Getty Images)

Colony Capital sells stake in RXR Realty

Colony Capital sells stake in RXR Realty
Larkin Plaza (Credit: Rendering courtesy of SLCE Architects)

RXR project among developments caught up in alleged Gambino mob scheme

RXR project among developments caught up in alleged Gambino mob scheme
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...