RXR Realty and Ares Management have joined forces to launch a $1 billion fund aimed at acquiring distressed office properties in Manhattan. According to the Financial Times, the partnership has already invested $500 million and plans to raise an additional $500 million.
The two companies are confident that the current state of uncertainty surrounding interest rates and remote working is beginning to thaw, making it an opportune time for investment. RXR CEO Scott Rechler stated that there is now clarity on interest rates, the future of offices, and which buildings will remain competitive in this new landscape.
Their strategy involves targeting high-quality office buildings that may need fresh capital or debt restructuring due to higher interest rates and slower rent growth. By carefully selecting these properties, they believe they can find real value at discounted prices.
Ares partner Craig Snyder noted that many institutional investors have fled from the office sector without discrimination, leading to historically low prices for top-tier properties. The partnership hopes their expertise will allow them identify long-term winners in this market.
This breaking news was first reported by Connect CRE.
