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
    RGB chair David Reiss (iStock, Brooklyn Law)
    City board casts preliminary vote in favor of rent hike
    City board casts preliminary vote in favor of rent hike
    SL Green’s director of leasing Steve Durels and One Vanderbilt. (SL Green, One Vanderbilt)
    SL Green to offer flex offices at One Vanderbilt
    SL Green to offer flex offices at One Vanderbilt
    Katie Kurtz and Silverstein Properties chairman Larry Silverstein (Silverstein, Getty)
    Silverstein Properties hires Katie Kurtz as new CFO
    Silverstein Properties hires Katie Kurtz as new CFO
    U.S. District Court Judge Dabney Friedrich (Senate/Chris Coons, iStock)
    Judge strikes down federal eviction ban
    Judge strikes down federal eviction ban
    Sen. Brian Kavanagh and RSA President Joe Strasburg (Getty, Strasburg via Jeffersons Siegel)
    Rent relief hinges on dwindling goodwill
    Rent relief hinges on dwindling goodwill
    Colliers International CEO Jay Hennick (Colliers, iStock)
    Colliers’ acquisitions help boost company’s Q1 revenue
    Colliers’ acquisitions help boost company’s Q1 revenue
    (Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
    Renters prepare for eviction crisis as aid is held up
    Renters prepare for eviction crisis as aid is held up
    Innovo Property Group CEO Andrew Chung and 1110 Oak Point Avenue 1110 Oak Point Avenue. (New York Expo Center, Innovo)
    Innovo Property Group aims to raise $140M for Bronx industrial site
    Innovo Property Group aims to raise $140M for Bronx industrial site
    arrow_forward_ios

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

    Loading...