Owners are abandoning the conversion at 745 Fifth as Plaza District office betting revives

The owners of 745 Fifth Avenue are waving the white flag for a residential redevelopment and refocusing on offices, a pivot that underscores how far Manhattan’s top office market has retreated.

Rithm Capital and the von Finck family last year abandoned plans to turn the Plaza District tower into apartments, according to a recent Fitch Ratings report detailed by From Crain. Instead, the partners are moving forward with a $275 million refinancing, including nearly $40 million in new equity and another $25 million earmarked for future lease costs, capital improvements and other expenses.

The 40,000-square-foot pre-war building was about 37 percent vacant in October, with about 200,000 square feet of office space yet to be filled. There is talk of the retail part: Bergdorf Goodman’s men’s store is located on the base. Upstairs, tenants enjoy the view of Central Park.

Control of 745 Fifth changed hands last month when Rithm acquired Paramount Group, which bought the building in 2002 for $263 million. Paramount had previously explored conversion options, part of a broader wave of Midtown landlords testing whether outdated offices could be classified as housing.

Rithm declined to explain why the renovation was shelved, but the costs are high. The city comptroller’s office has set the renovation of 750 Third Avenue at $663 per square foot. Applied to 745 Fifth, such pricing would push a resi overhaul north of $300 million.

Instead, ownership is betting that spectacular views and the building’s Fifth Avenue address — across from the Plaza Hotel and next to LVMH’s new tower — will be enough to attract tenants willing to pay for prime Midtown space.

In a statement, Rithm said it is seeing “strong demand for high-quality space” and expressed confidence in the long-term fundamentals of New York’s major office corridors.

That optimism does not arise in a vacuum. According to Colliers, Manhattan leasing reached 42 million square feet in 2025, the busiest year since before the pandemic; the volume was 25 percent higher than in 2024.

While large portions of older office inventory remain in distress, trophy properties in elite locations tell a different story.

— Holden Walter Warner

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