- RXR extended a $1.04B CMBS loan tied to 1211 Avenue of the Americas, pushing maturity out by three years after it hit special servicing.
- The office tower is facing headwinds, including a potential loss of up to 330K SF as Fox Corp. and News Corp. plan to reduce their footprint.
- RXR has committed $300M in upgrades and holds a 49% stake in the property, signaling a long-term bet despite high lease rollover risk.
A Loan Extension Under Pressure
RXR, which owns a 49% stake in 1211 Avenue of the Americas, secured a three-year loan extension, reports CoStar. Originally originated by J.P. Morgan, Citigroup, and Morgan Stanley in 2015, the loan entered special servicing with its maturity date looming in August 2025. The modification comes as the property battles financial strain and leasing uncertainty.
Murdoch’s Exit Looms Large
A major concern for the 45-story Midtown tower is the expected downsizing by Rupert Murdoch’s media companies. Fox Corp. and News Corp. reportedly plan to vacate up to 330K SF—nearly a quarter of the tower’s space. In response, KBRA downgraded the mortgage tied to the building, citing the potential loss in rental income, elevated lease rollover risk, and added pressure on RXR despite the recent loan extension.
A Risky Commitment
Despite weak debt coverage—just 0.97x in 2024 according to Fitch Ratings—RXR doubled down on the asset earlier this year by purchasing its 49% stake from Ivanhoé Cambridge. Alongside securing a loan extension, the company has also pledged a $300M capital improvement plan, hoping to reposition the property for a competitive post-pandemic office market.
Midtown’s Mixed Signals
While Manhattan’s office market is showing signs of life, it remains volatile. Leasing activity in April fell 26.2% from March, but was up 23% year-over-year, according to Colliers. That suggests tenant demand is recovering for RXR and other landlords, but slowly and unevenly across the city—posing both opportunity and risk for those navigating loan extensions and large vacancies.
What’s Next
RXR and its 51% partner now face the challenge of filling hundreds of thousands of SF in a transitioning market. The success of their $300M bet on upgrades, re-leasing, and the recently secured loan extension will be critical in determining the future value and viability of one of Midtown’s iconic office towers.
