Michael Maturo Keeps RXR Capital Flowing

It’s a good bet that most people who walk by 61 Broadway have no idea that the Class A office building in downtown Manhattan was the city’s seventh tallest structure when it opened in 1914, much less that it was designed by the architect Francis Kimball for the Adams Express Company.

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But when passersby look up to admire the 33-story tower’s handsome terracotta facade, one thing is impossible to miss: the blue banner bearing the logo of RXR Realty Corp., owner and operator of the 33-story property. The company has a passion for trophy buildings and develops a bold vision for each asset it acquires. Once transformed, a building begins its service as brand ambassador.

Each RXR asset has a unique story. In April 2016, RXR sold a 49 percent stake in 61 Broadway to China Orient Asset Management and landed $290 million in debt from Bank of China and SL Green Realty Corp. for the office property’s recapitalization. Spearheading this notable deal and many others for RXR was Michael Maturo, the firm’s president & CFO.

As a founding managing partner of RXR, Maturo has been a key force in the multibillion-dollar private real estate company’s strategy of owning a portfolio of the highest quality and best-performing real estate in New York City and the surrounding area. RXR’s high-profile Manhattan holdings encompass trophy assets like The Helmsley Building, 75 Rockefeller Plaza and the Starrett-Lehigh Building. Beyond New York City limits, RXR is also leading one of the nation’s largest suburban revitalization efforts as master developer of  New Rochelle, N.Y.’s $4 billion redevelopment program.

“Mike is pragmatic in his decision-making, and he gets to fair solutions for both sides,” said Michael Tepedino, senior managing director, capital markets at JLL, who has known Maturo for 26 years. “He thinks about business from a win-win perspective, not a win-at-all costs perspective. All of the constituents that Mike works with—tenants, investors, lenders, brokers—enjoy working with him, and therefore RXR.” 

RXR, which has offices in Midtown Manhattan and Uniondale, N.Y., was formed in 2007 by CEO and Chairman Scott Rechler after SL Green’s $6 billion acquisition of Reckson Associates Realty Corp. In all, RXR manages 71 commercial real estate properties and investments representing an aggregate value of approximately $20.5 billion. Those assets comprise approximately 31.4 million square feet of commercial properties (including approximately 6.0 million square feet of buildings securing debt and preferred equity investments); some 2,500 multifamily units in operation or under development; and development rights for approximately 3,700 rental and for-sale units in the New York City metropolitan area.

Deals that Drive Differentiation

Assisted by his team of 60 finance and asset management specialists, Maturo heads RXR’s capital raising and spends much of his time on corporate strategy, sales of assets, refinancings, recapitalizations and joint ventures. Maturo develops, implements and oversees RXR’s investment fund and asset management businesses as well as the company’s capital markets activities.

Andy Jonas, managing director and global co-head of real estate at Goldman Sachs & Co., has worked with Maturo on numerous equity, debt and strategic transactions, and cites the executive’s accomplishments in raising billions of dollars in capital and completing acquisitions valued in the tens of billions. “Mike has an amazing ability to understand all the details of a transaction,” Jonas said. “He has a deep knowledge of legal, tax, accounting and financial issues impacting real estate transactions.”

Maturo is also a respected voice in RXR’s collaborative process that positions properties in the marketplace. “We do a lot of creative things. We look at our customer base and understand trends ahead of where most people see them,” says Maturo. “We think outside the box on how we can differentiate the products we put in the market.”

For example, in April 2019 RXR announced an innovative partnership with Airbnb to convert portions of iconic NYC commercial properties into a new category of urban lodging, made available exclusively through the Airbnb platform. The first roll-out is planned for 75 Rockefeller Plaza, the Midtown Manhattan landmark and location of RXR’s New York City office. RXR and Airbnb are also exploring collaborations at other RXR properties, such as 47 Hall St., a collection of 10 buildings across from the Brooklyn Navy Yard.

RXR will be responsible for the execution and operation of the locations. Guests will find these new spaces exclusively through Airbnb’s global platform. The companies will collaborate on room and building design; development of a people-powered concierge model; curation of local experiences, services and amenities; and innovations in technologies and processes for the local/global traveler.

Picking a Specialty

A high-powered future in real estate executive was far from Maturo’s thoughts while he was growing up in northern New Jersey. “I was fairly athletic,” he says, “so I spent a lot of time on whatever field I could get to.” Today the busy executive and father of three still manages to work out daily. “I box and I do Pilates three days a week through a bootcamp workout,” Maturo reports. “I play basketball every Sunday with the same bunch of guys for the last 25 years,” he adds. He also finds time for his favorite charities, serving as chairman of the Catholic Community Foundation of Long Island.

Maturo has applied the same energy, loyalty and focus to real estate—a path that opened up unexpectedly. Upon graduating from Seton Hall University in New Jersey, Maturo was faced with choosing between multiple job offers, including one from a real estate consulting firm. A trusted friend, who also happened to be a CEO, advised: “You’re better off specializing in something than being a Jack-of-all-trades.” Maturo took the suggestion to heart and has never looked back.

 

Also enduring is his relationship with Rechler, which dates back to December 1994 when Rechler reached out to Maturo through an investment banker about becoming Reckson’s CFO. The two found an immediate rapport, and before long Maturo decided to make the transition to the investor side of the business.

By the time of the Reckson/SL Green merger in 2007, Maturo was serving as Reckson’s president, board member and chairman of the investment committee. During a quarter century at Reckson and RXR, Maturo has completed over $37 billion in capital markets transactions

“Mike has been a great partner for Scott Rechler and Jason Barnett (Reckson’s vice chairman & general counsel) and has played an integral role in the tremendous success of RXR,” said Jonas. “Mike’s knowledge of financial products and his ability to interact with investors, rating agencies, lenders and real estate owners has allowed RXR to become one of the leading real estate owners/operators.”

Today Maturo is a member of RXR’s board of directors and investment committee. He is also a principal and member of the investment committee of RXR Real Estate Opportunity Fund, RXR Real Estate Value Added Fund, RXR New York Metro Emerging Sub-Market Venture and RXR Real Estate Value Added Fund III.

Blueprint for Success

Some real estate watchers attribute RXR’s success to its regional focus. “We’ve been developing and operating in these markets for over 50 years. My partners and I have been executing together for the last 25 years,” Maturo observed.

RXR is attuned to what its customers are looking for, what tenants are looking for, what employees are looking for and what will attract talent to work in the properties. “In today’s market, it’s all about retaining talent,” Maturo said. “For tenants it’s no longer selecting a location or design that the CEO wants. It’s more about what will make your people happy.”

Success also results from having a robust property technology platform and focusing on the integration of technology with innovation. RXR is matching up concierge services and digitation of services to buildings. “We are meeting and doing business with some really interesting people who are looking at real estate in a non-traditional manner—and we’re incorporating those ideas into the physical side of real estate that we develop,” says Maturo.

“We’re fortunate to have been together through a number of real estate cycles,” he adds. “And we try to evaluate and understand those cycles, and then direct energy and capital into the product based on how we’re reading that.” The office development and acquisition market is not as robust due to concerns of recession, so RXR has been less active in acquiring office product.

Instead, the company has been working with large industrial companies that are looking for last-mile logistics solutions. According to Maturo, that encompasses a lot of thought on redesigning industrial buildings with cutting-edge technology and robotics. Currently they are working on plans for multiple  large, technology-driven logistics buildings in Queens.

RXR also continues to find opportunities in locations that offer a combination of transit links to New York City, opportunities to create affordable housing and willing municipal partners. In December 2014, RXR and its joint-venture partner, Renaissance Downtowns, was named master developer of New Rochelle’s downtown revitalization plan. The team is tasked with rejuvenating this northern New York City suburb a 30-minute train ride from Midtown Manhattan.

Highlights of the plan include 2.2 million square feet of office space, 5,500 residential units, 1.1 million square feet of retail and restaurants and 300,000 square feet of hospitality space. In July 2019, RXR and city officials marked the debut of 360 Huguenot, the redevelopment’s first completed project. The 28-story mixed-use tower features 280 rental units and 14,000 square feet of retail space.

75 Rockefeller Plaza  Photo courtesy of RXR Realty

RXR’s reach extends to other parts of the New York City metro area, as well. In April 2018 the company celebrated the opening Atlantic Station in downtown Stamford, Conn. Phase one is a 26-story mixed-use glass tower with 325 residential units and panoramic views of Long Island Sound and New York City. Atlantic Station also provides 24-hour concierge service and is the Connecticut’s only property to offer Hello Alfred in-home concierge services.

RXR currently has approximately 3,000 units in its development pipeline with projects in Brooklyn, Yonkers, New Rochelle and Long Island. Also in the pipeline is Nassau Hub, a planned $1.5 billion, 60-acre redevelopment surrounding Nassau Coliseum in Uniondale, N.Y. BSE Global, the sports and entertainment venue’s owner-operator, is teaming up with RXR on a plan that encompasses three distinct sections: an innovation hub, a sports and entertainment district and a town center.

 “We think that real estate is going through a fairly large change,” Maturo said. “The convergence of technology and real estate is starting to happen and we’re playing a lead role in that respect. So coming to work every day and thinking about all those ideas and how we can be a leader in that transformation is really fun these days.” 

Read the December 2019 issue of CPE.