Scott Rechler’s RXR Realty plans to buy 450 Lexington Ave., a 40-story midtown Manhattan office tower owned by Istithmar World PJSC, a person with knowledge of the negotiations said.
Rechler acquired debt on the 910,000-square-foot (85,000-square-meter) building starting about 18 months ago, and has been working on the acquisition since, said the person, who asked not to be identified because the talks are private. Istithmar will receive more than the $600 million it paid for the building in 2006, the person said.
The acquisition would give Rechler an addition to a portfolio that already includes the Starrett-Lehigh Building in west Chelsea. A joint venture including RXR purchased that property last year for about $920 million, according to data provider Real Capital Analytics Inc. Rechler has been one of New York’s most active real estate buyers since the 2008 credit freeze that caused values to plunge.
Edmund Tagliaferri, an RXR spokesman, declined to comment. A telephone call made after regular business hours to the New York offices of Istithmar, a private equity investment vehicle of the Dubai government, wasn’t immediately returned.
The agreement was reported earlier today by the Wall Street Journal on its website.
RXR controlled all the subordinate loans on 450 Lexington, known as mezzanine debt, giving it an inside track to the deal, said the person familiar with the talks.
Istithmar, a unit of Dubai World, bought several New York properties, including the Mandarin Oriental hotel at Time Warner Center and the W Union Square, before the real estate market’s peak in 2007, only to have to surrender some of them when its parent company became overextended.