KBRA Downgrades RXR, Ivanhoe Cambridge's 1211 Sixth Ave

This story has been updated to reflect KBRA walking back a report claiming Fox planned to vacate 330,000 square feet at 1211 Sixth Avenue.

Two years after casting an apparent vote of confidence in Manhattan’s office market, credit rating agency KBRA reported that Fox and News Corp. appeared to be on the verge of partially reversing course in Midtown.

KBRA claimed Fox and News Corp. plan to abandon 330,000 square feet at 1211 Sixth Avenue in November, Crain’s reported. The impending exit would have equated to about a quarter of the space Rupert Murdoch’s media empire has at the building, owned by Ivanhoé Cambridge and RXR. But the agency later retracted that claim.

Fox previously agreed to an extension in January 2023 to stay at the property until 2042. The media empire’s 1.2 million square feet there include Fox and News Corp.’s corporate headquarters, as well as the New York Post and Wall Street Journal newsrooms and Fox News studio space.

The extension was announced as two separate long-term deals: Fox’s 670,000-square-foot deal would begin in December 2025, while News Corp.’s 485,000-square-foot extension would start two years later.

CBRE’s Mary Ann Tighe, who negotiated the lease extension on behalf of the tenant and said Fox’s plans were known to the owner then, told Crain’s that “nothing has changed.” The parent company of Ivanhoé Cambridge did not respond to a request for comment.

Occupancy at 1211 Sixth Avenue is expected to drop from 94 percent to 74 percent, according to KBRA, as law firm Ropes & Gray is also planning to leave behind more than 300,000 square feet in approximately two years. Disney Streaming Services is expected to sublet 150,000 square feet as it relocates to 7 Hudson Square.

The occupancy rate is expected to stabilize at 88 percent.

RXR in January acquired a 49 percent stake in the building and embarked on a $300 million renovation plan, expected to last until 2028. Canadian pension fund Caisse de dépôt et placement du Québec owns the majority stake.

At the time of the acquisition, RXR factored in both Fox’s consolidation and the departure of major tenant Ropes & Gray, according to a spokesperson for the firm.

“These tenant changes created a rare opportunity to create a 600,000-square-foot ‘building within a building’ in the highly sought-after Rockefeller Center/Sixth Avenue Midtown submarket,” the spokesperson said in a statement.

KBRA downgraded the $1 billion mortgage backing 1211 Sixth Avenue, citing the “impending decline in the property’s occupancy.” The mortgage is set to come due in August.

— Holden Walter-Warner

This article has been updated to reflect KBRA’s retraction of a report claiming Fox was cutting its footprint at the building.