Developer Scott Rechler’s RXR Realty purchased the Helmsley Building, a landmark office tower on Park Avenue just north of Grand Central Terminal in Manhattan, for $1.2 billion.
RXR bought the 1.4 million-square-foot (130,000-square-meter) skyscraper from a joint venture of Invesco Ltd. and Monday Properties, Rechler said in a telephone interview Tuesday.
The property, at 230 Park Ave., is changing hands as commercial-property values surge in large cities. Centrally located U.S. office towers are fetching prices 22 percent above records set in 2008 as both foreign and domestic buyers seek the safe haven of trophy assets, according to Moody’s Investors Service and Real Capital Analytics Inc. index.
RXR is buying the tower, built in the 1920s, after agreeing in February to sell a roughly 50 percent stake in six New York-area office properties valued at $4 billion to Blackstone Group LP. That transaction marked the first large-scale recapitalization of the RXR portfolio since the company was created in 2007, following the sale of Rechler’s Reckson Associates Realty Corp. to SL Green Realty Corp.
Almost $200 million of capital improvements have been made at the 34-story Helmsley Building since 2002, when Monday Properties began operating it, according to Chief Executive Officer Anthony Westreich.
“We are delighted not only with the return on the investment, but that we had the opportunity to contribute to the building’s iconic status and leave a lasting legacy that will benefit the community,” Westreich said in statement Tuesday.
RXR’s purchase of the building, put on the market in October, was reported earlier today by the Wall Street Journal.