Office Venture Targets $3.5B In NYC Trophy Building Deals

Gemini Office Venture, majority-owned by RXR, has already closed over $3.5B in deals targeting New York trophy office assets at deep discounts.
The venture is backed by Baupost Group, King Street Capital, Criterion Real Estate Capital, Liberty Mutual Investments, and Abrams Capital.
Current holdings include three prominent Manhattan office buildings: 590 Madison Ave, 1211 Avenue of the Americas, and Starrett-Lehigh.
RXR CEO Scott Rechler says assets are being acquired at up to 50% discounts compared to peak valuations, reflecting a strategic move in a rebounding market.

Key Takeaways

A Bet On The Comeback

New York’s office sector is showing signs of stabilization, as reported by Bloomberg. In response, RXR has launched Gemini Office Venture. The platform aims to acquire premium office assets at distressed pricing. CEO Scott Rechler said the firm is targeting properties sold by institutional owners retreating from the sector during its downturn.

The venture is backed by heavyweight investors, including Baupost Group and King Street Capital. So far, it has closed over $3.5B in deals. RXR plans to continue accumulating assets while prices remain favorable.

A Trophy Portfolio

Gemini’s initial portfolio includes:

590 Madison Avenue: Acquired with Elliott Investment Management for over $1B, with plans to upgrade the lobby and shared spaces.
1211 Avenue of the Americas: A prime Midtown tower contributing to Gemini’s prestige office lineup.
Starrett-Lehigh Building: A large west side property that adds architectural distinction to the portfolio.

RXR holds between 49% to 51% stakes in the assets, and used advisers from Newmark and Eastdil Secured to structure and recapitalize the deals.

Market Drivers

Office leasing activity in Manhattan rose 38% year-over-year through August, per CBRE, signaling growing tenant demand. Residential conversions, rising construction costs, and a more active debt market have all played a role. Together, these factors have helped put a floor under valuations, according to Newmark’s Adam Spies.

RXR is positioning itself as an early mover in this new phase of the market cycle. Rechler emphasized that the firm began acquiring during the downturn with confidence in a recovery that is now materializing in leasing and financing markets.

Looking Ahead

Beyond office, RXR is also expanding into multifamily. In August, it announced a broader credit venture with Liberty Mutual to deploy up to $1B in US apartment investments. RXR has deep-pocketed partners and a contrarian strategy. The firm appears poised to stay active across distressed and transitional property sectors in the months ahead.