You can now count Scott Rechler among the real estate players who are embracing SPACs.
RXR Realty, which controls 26 million square feet of office space in New York City, is raising $250 million for a blank-check company to take a proptech firm public, it said in a regulatory filing Friday. The special-purpose acquisition company, dubbed RXR Acquisition Corp., will target companies with a clear path to profitability and the potential to be a “category leader.”
In addition to Rechler, RXR’s SPAC team includes Michael Maturo, CFO; Jason Barnett, general counsel; and Matthew Boras, who leads RXR Digital’s investing strategy. Its independent directors include Richard Florida, an urbanist and professor at the University of Toronto; Magalie Laguerre-Wilkinson, an executive at Nick News; Richard Saltzman, former CEO of Colony Capital; and Martin Luther King III, the oldest son of Martin Luther King Jr.
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Beyond its bricks-and-mortar holdings, RXR has been one of several real estate players to invest in proptech in recent years.
According to regulatory filings, RXR Digital has backed 10 proptech companies, including smart-lock maker Latch, which plans to go public via Tishman Speyer’s SPAC. It also invested in Metropolis, a parking startup; VTS, a lease management platform; Kitchen United, a ghost kitchen startup; and Eden, an office management firm which purchased Managed by Q from WeWork.
Not all investments have panned out, though. RXR invested in Lyric, a short-term rental startup backed by Airbnb, that folded over the summer when Covid decimated the travel industry. (Tishman Speyer, Fifth Wall Ventures and Barry Sternlicht were also investors.)
Nonetheless, RXR is bullish on proptech and adjacent industries, including financial services, logistics and infrastructure, it said in the prospectus. “We believe the real estate industry is undergoing a seismic shift whereby technology is fundamentally changing the way real estate is built, transacted, operated, utilized, and monetized,” it said.
Last year, RXR also began raising a $1 billion fund to invest in sectors it thinks will thrive in the post-Covid world, such as logistics, telehealth and residential. The RXR Real Estate Market Dislocation & Mega-Trends Fund will also look to find “pockets of distress” and provide rescue financing.
Rechler is the latest real estate player to pursue a SPAC deal.
CBRE has a SPAC, and Tishman Speyer is on its second SPAC. Howard Lutnick’s Cantor Fitzgerald has five SPACs, including one that plans to take smart-glass maker View public. Meanwhile, the Chera family’s Crown PropTech Acquisitions recently upsized its offering to $240 million. Last week, Fifth Wall Ventures closed a $347 million SPAC IPO.
Overall, 145 blank-check firms have gone public this year, raising $44.5 billion. That’s compared to 248 in all of 2020. Last year, SPAC IPOs raised $83 billion.