Major Financial Backing Fuels RXR's Ambitious Office-to-Housing Transformation in Lower Manhattan

In a move that signals growing institutional confidence in office-to-residential conversions, RXR Realty has assembled a substantial capital stack to transform one of its distressed downtown Manhattan properties into much-needed housing. The firm, led by CEO Scott Rechler, partnered with One Investment Management to secure $475 million in combined tax equity and construction financing from heavyweight lenders Apollo Global Management and JPMorgan Chase.

The transaction centers on 61 Broadway, a 33-story tower in the Financial District that has faced significant headwinds amid the post-pandemic office market downturn. Rather than holding onto a struggling asset, RXR is taking a proactive approach by converting the building into 796 residential units—a project that could serve as a blueprint for similar repositionings across the city.

According to Commercial Observer, the financing package represents a vote of confidence from two of the most sophisticated players in real estate lending, suggesting that well-structured conversion plays can still attract serious capital even in a challenging interest rate environment.

Key Details

The $475 million capital raise combines tax equity investment with traditional construction debt, a structure that has become increasingly common for adaptive reuse projects seeking to maximize returns while managing risk. Apollo and JPMorgan's involvement underscores the institutional quality of the sponsorship and the perceived viability of the conversion strategy.

The property at 61 Broadway spans approximately 450,000 square feet and has historically served as office space for financial services tenants. The planned conversion will create 796 residential units, making it one of the larger adaptive reuse projects currently underway in Lower Manhattan. RXR has been actively reshaping its portfolio of legacy office assets, recognizing that certain older buildings may be better suited for residential use in the current market cycle.

Market Impact

For commercial real estate professionals, this transaction offers several important takeaways. First, it demonstrates that capital remains available for well-conceived conversion projects, even as traditional office lending has tightened considerably. The participation of Apollo and JPMorgan suggests that institutional lenders view select office-to-residential conversions as a viable path to value creation.

Second, the deal highlights the growing importance of tax equity structures in financing complex repositionings. As conversion costs continue to rise, developers are increasingly relying on tax incentives and equity partnerships to make the economics work.

Finally, RXR's approach—acting decisively to reposition a distressed asset rather than waiting for an office market recovery—may represent a model for other owners grappling with underperforming properties. The firm's willingness to invest in transformational change, backed by patient institutional capital, could accelerate the pace of adaptive reuse across major urban markets.