Rockefeller Center Properties Secures $250 Million Investment

Strategic Insights -

Rockefeller Center Properties, Inc. (RCPI), a mortgage real estate investment trust, has signed a letter of intent with Equity Office Holdings, L.L.C., a national office building investment and management company led by Samuel Zell, to secure a $250 million investment for a recapitalization and deleveraging of RCPI. The investment, made by the Zell Group, including The Walt Disney Company, will result in a new company owned in approximate equal proportions by the Zell Group and existing equity holders of RCPI. The Zell Group's investment is made through Zell/Merrill Lynch Real Estate Opportunity Partners Limited Partnership III, an institutional real estate investment fund sponsored by Zell and Merrill Lynch.

The letter of intent also enables RCPI to call upon the Zell/Merrill Lynch III fund for an initial $33 million cash infusion in the form of a $10 million working capital loan later this month and the purchase of $23 million of common stock in the fourth quarter of 1995. This recapitalization will enable RCPI to pursue a viable plan of reorganization for Rockefeller Center, a 12-building landmark office and retail complex in midtown Manhattan with 6.2 million square feet of net rentable space.

Key Takeaways:

  • RCPI has secured a $250 million investment from the Zell Group, including The Walt Disney Company, for a recapitalization and deleveraging.
  • The Zell Group's investment will result in a new company owned in approximate equal proportions by the Zell Group and existing equity holders of RCPI.
  • The Zell Group's investment is made through Zell/Merrill Lynch Real Estate Opportunity Partners Limited Partnership III, an institutional real estate investment fund sponsored by Zell and Merrill Lynch.
  • RCPI will receive an initial $33 million cash infusion, including a $10 million working capital loan and the purchase of $23 million of common stock.
  • The working capital loan will be provided by Zell/Merrill Lynch III, a $682.1 million institutional real estate investment fund.
  • Rockefeller Center, a 12-building complex with 6.2 million square feet of net rentable space, filed for Chapter 11 protection on May 11, 1995.
  • The recapitalization will enable RCPI to pursue a viable plan of reorganization for Rockefeller Center.

Statistics:

  • $250 million: the amount invested by the Zell Group in RCPI's recapitalization and deleveraging.
  • 38,260,704: the number of shares of common stock outstanding in RCPI as of August 15, 1995.
  • 45: the number of markets nationwide where Equity Office and its subsidiaries manage and operate more than 27 million square feet of office space.
  • $682.1 million: the equity capital commitments of Zell/Merrill Lynch III, the third in a series of funds investing in high-quality, diversified portfolios of real estate assets.

Sources:

  • Business Wire, August 16, 1995
  • Equity Office Holdings, L.L.C. press release
  • Rockefeller Center Properties, Inc. press release