RXR Closes On First Brooklyn Asset: 470 Vanderbilt Avenue
February 28, 2014 – (New York) – RXR Realty LLC (“RXR”), a leading real estate company in the New York Tri-State area, announced the purchase of 470 Vanderbilt Avenue in Brooklyn. The purchase price was $194.5 million, or about $300 per square foot, for the 10-story, approximately 650,000-square-foot property.
The deal is RXR’s first New York City acquisition as part of its New York Metro Emerging Sub-Market initiative, which focuses on undervalued neighborhoods that are well-positioned geographically and demographically with strong infrastructure in New York City’s outer boroughs and suburban downtown districts located around transit hubs.
The property, which occupies almost two-thirds of the square block bounded by Atlantic, Avenue, Vanderbilt Avenue, Clermont Avenue and Fulton Street, was built in 1913 and underwent a $74 million-renovation that was completed in 2012. Today, 470 Vanderbilt sits at the center of some of Brooklyn’s most dynamic neighborhoods, facing the Atlantic Yards site and sitting at the confluence of Fort Greene, Clinton Hill and Prospect Heights. The building is less than a mile from Grand Army Plaza and Prospect Park, a half-mile from the Brooklyn Academy of Music and the Downtown Brooklyn Cultural District, and only five blocks from The Barclays Center and Atlantic Terminal.
“The 470 Vanderbilt Avenue acquisition represents an opportunity for us to buy a building with healthy current returns generated by credit tenants, while also participating in the amazing transformation that is taking place across Brooklyn,” said Scott Rechler, Chairman and CEO of RXR. “We are extremely excited to build on the work done by previous owners of the building, integrating it into the booming communities that surround it on all sides.”
Rechler added that RXR believes that creative, media and technology tenants will be attracted to the building’s 55,000 square feet of vacant office space because of its central location, its multiple lobbies and elevator banks, and its high ceilings, expansive window lines and abundant air and light. He added further that the building’s more than 20,000 square feet of currently vacant retail space present the opportunity to bring services and amenities to existing residents in surrounding neighborhoods, the thousands of people coming through the building on most weekdays, and those who will occupy the new development slated for the building’s vicinity.
The building is 88 percent leased and tenants include the City of New York and The League Education & Treatment Center, a 50-year old, internationally-recognized, not-for-profit organization serving children and adults with developmental disabilities. The building is also occupied by media and technology tenants, Aereo and Switchnet, and a state-of the-art, self-sustaining data hub for technology and telecommunications companies. The building’s data hub, which is at 70 percent capacity, is served by two diverse fiber points of entry and is designed to accommodate power failures and interruptions, as well as low-voltage conditions.
RXR’s New York Metro Emerging Sub-Market initiative grows out of RXR’s belief that the New York metropolitan region will continue to present among the world’s strongest fundamentals for growth in coming years. When combined with constrained supply, this will raise costs for commercial and residential space in core New York markets and will create demand in new areas, such as emerging sub-markets. RXR also believes that emerging sub-markets will benefit from changing lifestyles and work trends that have made walkable, mixed-use communities with moderate to high density and diversity increasingly desirable – especially to young people starting their careers and retirees. Through its initiative, RXR is targeting “emerging urban sub-markets,” which consist primarily of neighborhoods in New York City’s outer boroughs, and “urban-suburban sub-markets,” which are suburban downtown districts around existing or planned transit hubs.
Located in the heart of “emerging Brooklyn,” 470 Vanderbilt is one of only a very small handful of existing office buildings of scale near its site and, therefore, is uniquely positioned to benefit from the exciting changes taking place around it. Among these changes are the development of nearly 7,000 units of housing and eight-acres of new open space in several planned buildings, including 16 primarily residential towers planned for Atlantic Yards. The building is also well-served by public transit, with the Clinton-Washington subway stop two blocks away and the Atlantic Avenue station, with its 9 subway lines and Long Island Railroad terminus, an eight-minute walk away.
“Going forward, while continuing to accommodate its existing tenant base, we will make 470 Vanderbilt a destination for the kinds of companies that have been driving the Brooklyn renaissance in recent years,” said Seth Pinsky, Executive Vice President and Fund Manager, Metro Emerging Marketsfor RXR. “The building’s floor plates, ceiling heights, and robust infrastructure are exactly what tenants in a wide-range of industries are seeking in Brooklyn today.”
About RXR Realty
RXR Realty LLC (“RXR”) is a vertically integrated private real estate company with expertise in investment management, property management, development, design, construction, leasing and financing. RXR’s core growth strategy is focused on New York City and the surrounding tri-state area markets. The Company is one of the largest owners, managers, and developers in the New York Tri-State area with interests in approximately $6.5 billion of assets, comprised of 87 operating properties containing approximately 17.7 million square feet. For more information about RXR, visit www.rxrrealty.com.