RXR purchased a minority stake in a Midtown office tower dominated by Rupert Murdoch’s media empire.
Scott Rechler’s firm bought a 49 percent stake in Ivanhoe Cambridge’s 1211 Sixth Avenue, Bloomberg reported. The property sports a $1.2 billion valuation. Ivanhoe and its then-partner, Callahan Capital Properties, paid $1.7 billion to purchase the property, which unfolded over two separate stake sales.
RXR and Ivanhoe Cambridge, the real estate arm of Canadian pension fund Caisse de Dépôt et Placement du Québec, plan to pour $300 million into renovating the 45-story tower. Renovations will include updates to the lobby and plaza, as well as the addition of a wellness center.
Ivanhoe already agreed to interior and exterior renovations as part of its latest lease agreement with Murdoch’s Fox Corporation and News Corporation.
Strategic Capital Alliance and Newmark’s Adam Spies and Doug Harmon advised RXR on the deal. In addition to operating the property, Rechler’s firm will also provide education workshops and wellness initiatives.
The first challenge RXR will face as a member of the ownership group is a $1 billion loan due to mature in August; Rechler plans to speak with the lenders. RXR is coming in for 49 percent of the renovation costs and debt.
Fox and News Corp. signed 20-year renewals for their respective headquarters at 1211 Sixth Avenue two years ago. The two pillars of Murdoch’s empire combine to occupy 1.1 million square feet, or more than half of the property’s rentable space.
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Ivanhoe recently lost one of the building’s other top tenants, though, in law firm Ropes & Gray. The company, which occupies 300,000 square feet at 1211 Sixth Avenue, is set to depart at the end of 2027 and move to 430,000 square feet at 1285 Sixth Avenue, which is owned by none other than RXR.