STRS Ohio Weighs Options for $1.1B Sale of Madison Ave Building

The State Teachers retirement System of Ohio (STRS Ohio) is considering multiple options as part of the $1.1 billion sale offering of 590 Madison Avenue — which is one of the highest asking prices for the office sector since the onset of the pandemic. Initial announcements of the sale by the pension fund were released in mid-February for the approximately 1 million-square-foot Plaza District property that spans the entire Madison Avenue blockfront between East 56th and 57th Streets. Although the deal is currently structured as a “deferred payment sale in which the buyer could pay installments to meet the heavy $1 billion-plus price tag,” ownership is also now “weighing 100 percent purchase options in addition to selling the tower.” Bids were due May 2nd, and while multiple bidders remain in play, at the end of April Blackstone Group was reportedly the odds-on favorite due to “plenty of dry powder to finance the purchase itself” according to The Real Deal, but more recently one source indicated to the Commercial Observer that “it was a two-horse play between RXR Realty and Tishman Speyer.”

STRS Ohio and Edward J; Minskoff Equities purchased the building for an undisclosed price in 1994, former owner International Business Machines Corp. (IBM) simultaneously securing a leaseback of the building; but in 2024 relocated to a 362,092-square-foot One Madison Avenue, which enabled the firm to consolidate ten New York City offices while downsizing its Manhattan footprint. In 2015 STRS Ohio reportedly purchased Minskoff’s stake, however, Minskoff continued to manage the property. Continuing to be called the IBM Building, despite the loss of its namesake tenant, notable lease signings in recent years include an 87,500-square-foot lease in 2020 by American Securities, paying a base rent of $102 per square foot that escalated to $140 per square foot in years 11 through 15 and included 20 months of free rent and a $160 per square foot workletter according to an ABS Partners’ data at the time. In 2024, a 150,000-square-foot lease by multinational holding company LVMH was secured; and in 2025, alternative asset manager Apollo Global Management signed a 15-year lease for 96,224 square feet at a base rent of $98 per square foot, escalating to $118 per square foot in the final five years with a 15 month rent concession and $150 per square foot workletter according to ABS Partners’ data. If the sale clears the $1 billion mark, it would be the first New York City sale to fetch a 10-figure price since Google parent company Alphabet purchased 550 Washington Street for roughly $1.97 billion in 2022

Source:    https://commercialobserver.com/2025/05/590-madison-installment-sale/

Source:   https://therealdeal.com/new-york/2025/04/30/blackstone-group-favorite-to-buy-590-madison-avenue/