Sagehall Joins RXR as Equity Partner at 530 Fifth Avenue

Scott Rechler added an equity partner at his firm’s 475,000-square-foot office property in Midtown Manhattan.

Sagehall, run by Lanee Yung and Extell Development veteran Sush Torgalkar, joined the ownership group of RXR’s office building at 530 Fifth Avenue, the Commercial Observer reported. Torgalkar referred to the investment as an “opportunity to capitalize on the recovery in the office market” and cited the appeal of the Grand Central submarket.

The partners also recapitalized the property. They are injecting $70 million of capital into the building while also taking out a five-year, $110 million loan facility from ING Capital. They plan to reposition and upgrade the asset.

A Newmark team including Adam Spies and Josh King negotiated the loan.

The property is the flagship location of flex space provider Convene, which occupies 116,000 square feet. Other tenants include Avison Young, PEI Group and Major, Lindsey & Africa. Approximately 78,000 square feet of leases have been signed at the property in the last two years, including an 11-year lease inked last month by the New York City Police Foundation.

The office building is 85 percent occupied.

There’s also a retail condo at the address. Joe Sitt’s Thor Equities bought into the space partnership with General Growth Properties — the predecessor to Brookfield’s mall division — for $595 million. Thor later reduced its ownership to about 10 percent by selling the rest to General Growth in a complex deal to repay the loan it received from its partner to buy its half stake.

Last year, two investors sued Thor’s ownership entity of the retail condo and demanded to see the books after Sitt failed to pay distributions they were expecting, according to the lawsuit.

When the lawsuit was filed, a source close to the developer told The Real Deal that “Thor did not manage this asset and is willing nonetheless to facilitate the investors’ access to information so that they are assured that their investment was handled properly.”

— Holden Walter-Warner