Rithm Finds JV Partner for Trophy Midtown Office Tower
Ask and ye shall receive, at least when it comes to Rithm Capital’s dream of a partner at a trophy Midtown Manhattan office tower.
DRA Advisors is joining Michael Nierenberg’s Rithm as a joint venture partner at 1301 Sixth Avenue, taking a 49 percent stake in the building, the Commercial Observer reported. The deal values the building at $1.3 billion, slightly below the $1.4 billion valuation Rithm was shooting for when its joint venture aspirations were revealed by The Real Deal in March.
Rithm is holding onto a 51 percent stake in the 45-story, 1.7-million-square-foot property, which it runs through the Elecor Properties affiliate. Newmark’s Adam Doneger, Adam Spies and Ben Lushing arranged the joint venture.
“Partnering with an experienced, well-capitalized firm like DRA allows us to continue growing Rithm’s asset management platform while staying closely involved in the asset’s long-term success,” Nierenberg said in a statement.
Tenants at the 1960s-era tower, which is fully leased, include Piper Sandler, Credit Agricole and O’Melveny & Myers. Paramount Group, which was acquired by Rithm last year, invested in the building with upgrades like a renovated lobby and updated elevator system. It also built an amenity center on the building’s concourse level and secured a $900 million CMBS refinancing for the property last year.
Rithm acquired Paramount in a bidding process that included SL Green, Vornado, Blackstone, Empire State Realty and DivcoWest with Dubai-based Saray Capital.
Over the summer, it was revealed that Rithm was approaching a $500 million refinancing for 31 West 52nd Street in Midtown Manhattan, consisting of a $415 million commercial mortgage-backed securities loan and $85 million in mezzanine debt.
To secure the financing, which features a 6.85 percent interest rate and a December 2029 maturity date, Rithm is contributing $72.5 million in equity and reserving nearly $43 million for leasing commissions and capital improvements.
Earlier this year, DRA Advisors purchased the 340-unit The Enclave at 127th apartment complex in Plainfield, Illinois, from JVM Realty for $95 million, or about $279,000 per unit, and assumed an existing $64 million loan.
Read more
Rithm eyes $1.4B valuation for Paramount’s trophy office tower
Rithm Capital approaches $500M refi of Midtown office
DRA Advisors snaps up Plainfield apartments for $95M
