SL Green Buys Debt On RFR’s Vacant Fifth Avenue Tower, Plans Partnership
As RFR Holding’s troubles in the New York City office market unfold, another big name has seized the opportunity to grab a piece of the embattled landlord's valuable portfolio.
SL Green Realty has bought the $224M senior loan backed by RFR’s 522 Fifth Ave., a vacant 23-story office tower, Commercial Observer reports.
But SL Green reportedly isn't planning to take over the building. Instead, it plans to work with RFR to renovate the property together and find a single tenant to take all 600K SF.
“RFR is recapitalizing 522 Fifth Avenue with SL Green, which includes purchasing the debt from the previous lenders,” a spokesperson for RFR told Bisnow by email. “Renovation work is scheduled to begin this month, and RFR remains enthusiastic about this exciting project.”
SL Green didn't respond to Bisnow’s request for comment. It bought the floating-rate loan from Credit Suisse at a discount, CO reported, citing unnamed sources.
RFR bought 522 Fifth Ave. from Morgan Stanley in 2020 for $350M. It had previously served as the investment bank's headquarters and as the HQ for J.P. Morgan Asset Management before that.
Credit Suisse began preforeclosure proceedings on the property in June, claiming that RFR didn't pay off the mortgage when it matured, The Real Deal previously reported.
A Newmark team of Adam Spies, Joshua King, Douglas Harmon, Marcella Fasulo, Adam Doneger and Willis Robbins represented Credit Suisse in the deal. Newmark declined to comment.
If RFR manages to turn around the property, with the help of NYC's largest office landlord, it would be the second major win the company has scored this year as it reckons with billions in maturing loans.
RFR scored one of the year’s biggest deals when Bloomberg Philanthropies purchased 980 Madison Ave. for $560M. But the firm is still facing a potentially rough ride for the rest of the year following a bumpy summer, with an estimated $2.5B in loans due to mature before next May, including 522 Fifth.
Last month, RFR was hit with two lawsuits from Rialto Capital for loans totaling $22M. RFR had stopped making payments on debts covering retail condos at 122 Greenwich Ave. in the West Village and 219 E. 67th St. in Lenox Hill, Rialto claimed in the lawsuits.
The landlord then missed a balloon payment on a $180M CMBS loan covering 17 State St., a 42-story office tower in Battery Park City, sending the loan to special servicing last month.
Just one week later, RFR found itself on the wrong end of a foreclosure suit after Citibank and JPMorgan Chase filed to try and collect on a $180M loan linked to 475 Fifth Ave., a 275K SF office tower close to Bryant Park.
