RXR makes $220M apartment bet in Brooklyn

Deal for 85 Jay Street rentals is biggest of its kind during pandemic

New York /
Apr.April 13, 2021 09:01 AM
A rendering of 85 Jay Street and RXR Realty CEO Scott Rechler (Winick, Getty)

A rendering of 85 Jay Street and RXR Realty CEO Scott Rechler (Winick, Getty)

As New York rents’ nosedive shows signs of leveling off, a big apartment deal in Brooklyn might brighten investors’ spirits.

RXR Realty is in contract to buy the rental portion of CIM Group and LIVWRK’s Dumbo luxury development at 85 Jay Street for $220 million, sources familiar with the sale told The Real Deal.

It’s the first big deal for a market-rate rental building to come up for sale and go into contract since the pandemic started last spring — and an encouraging sign for New York real estate pros looking to get back to the city’s wheeling-and-dealing days.

Cushman & Wakefield's Doug Harmon and Adam Spies

Cushman & Wakefield’s Doug Harmon and Adam Spies

Representatives for RXR Realty, CIM Group and LIVWRK did not immediately respond to requests for comment. The property was marketed by a Cushman & Wakefield team led by Adam Spies and Doug Harmon, who declined to comment.

The contract price works out to $687,500 per unit for the new, 320-apartment building that will be delivered vacant in September. Adam Doneger, Marcella Fasulo, Michael Collins and Dan O’Brien are part of the Cushman & Wakefield team that marketed the property.

CIM Group and LIVWRK developed the rentals as part of a 1.1 million-square-foot building that includes 131,000 square feet of retail and 408 condominiums, which are not part of the sale to RXR. The developers put the property on the market earlier this year expecting $235 million. And while the contract price came in 6 percent lower, the big-ticket deal is seen as a shot in the arm for the sluggish investment sales market, which takes its cues from the ebbs and flows in rents.

Lease signings have been on the rise in Manhattan and Brooklyn since the fall, giving landlords hope that things are turning around. Median rents are still falling, but the rate of decline is easing and the new rental activity points to prices stabilizing.

Rechler’s RXR Realty has been focusing lately on New York City suburbs such as Westchester, Long Island and northern New Jersey, capturing demand from New Yorkers leaving the city before and during Covid.





    Related Articles

    arrow_forward_ios
    National chains and mom-and-pop stores are seeing increasing sales per square foot and shrinking occupancy costs (Getty)
    National chains paid 93% of rent in April
    National chains paid 93% of rent in April
    (RIPCO, iStock)
    Target, Five Below, Smashburger open in new Brooklyn shopping center
    Target, Five Below, Smashburger open in new Brooklyn shopping center
    Close to 80 hotels with more than 13,000 rooms plan to open in 2021. (iStock)
    Big year seen for hotel openings, despite few visitors
    Big year seen for hotel openings, despite few visitors
    Savanna’s Christopher Schlank and Nicholas Bienstock with a rendering of 141 Willoughby Street (Savanna; SLCE Architects; Fogarty Finger Architects)
    Savanna nabs $264M loan for Downtown Brooklyn office project
    Savanna nabs $264M loan for Downtown Brooklyn office project
    Blackstone president Jon Gray and the Blackstone headquarters at 345 Park Avenue in NYC (Getty, Google Maps)
    Blackstone sets office return for some vaccinated staffers
    Blackstone sets office return for some vaccinated staffers
    Slate Property Group's Martin Nussbaum and a rendering of the project
    Hakimian, Certes land $59M loan for East Harlem multifamily project
    Hakimian, Certes land $59M loan for East Harlem multifamily project
    Watch TRD Brand Studio’s first-ever webinar on the new office normal
    Optimizing the office: TRD Brand Studio webinar on the new workplace normal
    Optimizing the office: TRD Brand Studio webinar on the new workplace normal
    President Joe Biden and New York State Senator Brian Kavanagh. (Getty, Department of Treasury)
    Federal guidelines could complicate state’s rent relief rollout
    Federal guidelines could complicate state’s rent relief rollout
    arrow_forward_ios

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

    Loading...