Scott Rechler’s RXR Realty is washing its hands of the first office it ever acquired in Brooklyn.
Lincoln Property Company and Cross Ocean Partners joined forces to acquire the leasehold interest on the office building at 470 Vanderbilt Avenue in Clinton Hill, Commercial Property Executive first reported. A sale price wasn’t disclosed, but sources told The Real Deal it changed hands for $70 million, or $108 per square foot.
The ground lease with Sol Goldman Investments still has 60 years left on it. The balance on the leasehold’s loan, last known to be refinanced in 2019, is $182 million.
CBRE’s Doug Middleton and Jack Stillwagon negotiated the leasehold interest sale.
A source close to the transaction noted that RXR viewed the asset in the “film” category, not up to the standard of the “digital” assets the company prizes.
Representatives for both Lincoln Property and Cross Ocean referenced the importance of the asset’s strong cash flow in teaming up for the first time to acquire the 650,000-square-foot property, according to Globe St.
RXR acquired the building in 2014 for slightly under $195 million, its first purchase in Downtown Brooklyn, and one of the largest office deals in borough history. The firm quickly got going on a $74 million renovation and upgrade to the property, which was converted to an office in 2012 after about a decade as a data center.
The building is fully leased, largely to the New York City Human Resources Administration and the New York City Housing Authority. There’s 20,000 square feet of retail space on the ground floor; wholesale retailer Boxed signed a lease for 15,000 square feet in 2022 at an asking rent of $50 per square foot, according to the Commercial Observer.
The leasehold interest sale marks just the fourth office investment for Cross Ocean, which has approximately $10 billion in assets under management. It is, however, the asset manager’s sixth investment in the New York metro area in the last year.
Lincoln Property has also made a half-dozen investments in the area in the last year or so. The firm is among the finalists to redevelop the Midtown CBS broadcast center.
Rich Bockmann contributed reporting.
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