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Mar. 27, 2014
Crain's New York Business

In its first foray into the financial district, RXR Realty has purchased the 33-story office building at 61 Broadway.

By Daniel Geiger

Big league commercial landlord RXR Realty is finally making its entry in lower Manhattan. The firm is in contract to buy 61 Broadway, a 33-story, 787,000-square-foot office tower on the corner of Exchange Place for $330 million.

The real estate firm, led by chief executive Scott Rechler, has been one of the busiest buyers of commercial property in the city, but while it got close to a large downtown acquisition last year, the deal for 61 Broadway is the company’s first in the neighborhood.

RXR Realty is buying the 98-year-old property from Broad Street Development, a company operated by Raymond Chalme and Daniel Blanco. That duo also recently sold a building just down the street at 55 Broadway to Harbor Group. That one fetched $157 million.

Late last year, RXR Realty was one of the finalists in the bidding war for One Chase Manhattan Plaza, the 60-story, 2.4 million-square-foot former home of Chase Manhattan Bank in the heart of the Financial District. In that contest RXR lost out to China-based Fosun.

RXR Realty is also shopping around in the outer boroughs, where it just acquired a long term leasehold of 470 Vanderbilt Ave., an office building near Atlantic Yards at the edge of downtown Brooklyn.

But downtown has remained an attractive place for investment. Tenants have flocked to the area from midtown and midtown south because lower Manhattan’s rents are comparatively cheaper. And the years-long process of upgrading the area’s transit infrastructure at the Fulton Street Transit Center and the World Trade Center PATH hub is almost done.

Sources familiar with 61 Broadway said that a large portion of its leases expire in the near term, which will allow RXR Realty to improve the property. The plan, these sources said, is to appeal to tech and creative companies being pushed out of midtown south by offering them lower cost rents.

A brokerage team from Jones Lang LaSalle led by Richard Baxter, Jon Caplan, Ron Cohen and Scott Latham handled the sale of 61 Broadway for Broad Street Development. The four brokers also sold 55 Broadway for the company.

Correction: RXR Realty is in contract to buy 787,000-square-foot 61 Broadway for $330 million. The size and price were misstated in a previous version of this article, published March 27, 2014.