RXR Closes on Financing for FiDi Office-to-Resi Conversion

Why It Matters

The financing highlights the accelerating shift of under‑utilized office assets into housing, addressing New York’s affordability pressures while unlocking tax‑credit incentives for developers.

Key Takeaways

• $500M+ financing secured for 61 Broadway conversion
• Project will deliver 796 residential units by 2028
• JPMorgan contributes $55M tax equity; Apollo provides $420M loan
• Historic tax credits may reduce overall development costs
• Part of broader office‑to‑resi wave in NYC

Pulse Analysis

The post‑pandemic office market has left a surplus of high‑grade space in Manhattan, prompting developers to repurpose buildings for residential use. Policymakers have responded with incentives such as historic preservation credits and tax‑equity programs, making office‑to‑residential conversions financially attractive. RXR’s 61 Broadway project exemplifies this trend, pairing a sizable construction loan with a strategic tax‑equity partnership to bridge the gap between acquisition costs and long‑term rental revenue.

The financing structure for 61 Broadway is a textbook case of layered capital. Apollo’s affiliates are providing $420 million in construction debt, while JPMorgan’s $55 million tax‑equity investment leverages anticipated historic tax credits tied to the building’s 1913 origins. This combination reduces the equity burden for RXR and One Investment Management, allowing them to allocate resources toward additional conversion projects. The involvement of JLL Capital Markets underscores the importance of specialist advisory firms in orchestrating complex, multi‑source financing packages.

For the broader real‑estate market, the deal signals a durable shift toward mixed‑use development in dense urban cores. By converting office floors into 796 rental units, the project adds much‑needed housing supply, potentially easing rent pressures in the Financial District. Investors are likely to view such conversions as lower‑risk, income‑generating assets compared to speculative office space, especially when bolstered by tax credits. RXR’s pipeline, including the upcoming 5 Times Square conversion, suggests that this financing model may become a template for future adaptive‑reuse projects across the city.