In a historic deal for Manhattan, NY, RXR real estate investment firm bought the 42 -storey, class A skyscraper on 590 Madison Ave. For around $ 1.1 billion. This marks the largest purchase of office space in Manhattan in more than three years.
The selling price is highest on the office market in New York City, because the parent company of Google, Alphabet, 550 Washington St. has taken over for nearly $ 2 billion in 2022. That real estate of 1 million square foot, formerly known as the IBM building, was sold by the Pension System of the Staats Teachers of Ohio, that almost 30 years.
The ownership of Madison Avenue, located in the prestigious Plaza district, has been a hub for high-end leasing. According to RXR, the building has drawn more than 300,000 square feet in new lease contracts in recent months, which demonstrates a strong demand for top locations. It has also undergone more than $ 100 million in renovations, including a new $ 400+ million, 21,000 square foot Antenity Suite known as the Madison Avenue Club.
Tenants include Apollo Global Management, which signed a lease of 96,000 square foot in April, as well as Tiger Management and Louis Vuitton. In addition, the retail space on the ground floor has “High-Street Retail exposure” with a lease roster with luxury jeweler Bucherer.
In a separate announcement, RXR unveiled an extensive Partnership with Liberty Mutual InvestmentsAs a result, they plan to use $ 1 billion for credit options, including senior loans and construction financing. The acquisition of Madison Ave. 590, however, was a partnership with Elliott Investment Management and was funded with a senior mortgage from Apollo Global Management. Eastdil Secured represented the seller, while Newmark RXR advised on Equity Capital.
Real estate experts look closely at this purchase as a sign of renewed belief in the best office market in Manhattan. RXR stated that the deal fits the “Office Recovery strategy”, where class A and trophy properties are purchased with a discount. The company believes that these assets will become ‘long -term winners’, especially because the supply of high -quality office space in Manhattan is shrinking and the demand remains strong.
About the author / Diana Sabau
With years of intense research into the American commercial real estate market on Yardi Matrix, Diana is currently putting her experience to use by writing for various Yardi blogs. She covers cre -investments, trends in the labor market and technology. Her work can be seen in the New York Times, Globest, The Real Deal, Naiop, MSN and Bisnow.
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