Surge in Manhattan Office Building Sales Arrives Quicker than Expected

Investment sales activity in Manhattan has picked up steam and doesn’t appear to be slowing down anytime soon. Buyers include a mix of bargain hunters and developers pursuing office-to-residential conversions. Transactions announced in August and September were centered on Midtown including:135 E 57th Street’s 99-year ground lease was purchased by TF Cornerstone for $158,956,065. The Wallace family is longtime fee-owner of the approximately 456,652-square-foot building located on the corner of Lexington Avenue in Midtown’s Plaza District. The buyer is planning a 350-unit office-to-residential conversion.

• 135 E 57th Street’s 99-year ground lease was purchased by TF Cornerstone for $158,956,065. The Wallace family is longtime fee-owner of the approximately 456,652-square-foot building located on the corner of Lexington Avenue in Midtown’s Plaza District. The buyer is planning a 350-unit office-to-residential conversion.

• 1177 Avenue of the Americas located in Times Square is in contract for $542,600,000. Norges Bank Investment Management and Beacon Capital Partners are purchasing the just over 1 million-square-foot building from Silverstein Properties and California State Teachers’ Retirement System (CalSTRS), having last traded in December 2007 for $1,000,850,706. The sale is expected to close before the end of the 3rd quarter.

• 590 Madison Avenue was purchased by RXR Realty and Elliott Investment Management for $1.08 billion. The sale of the nearly 1 million-square-foot building located in the Plaza District fetched close to the reported $1.1 billion asking price that seller State Teachers Retirement System of Ohio was seeking.

• 440 Ninth Aveue located in the Penn Plaza area sold to investor David Werner for $100 million. The price fetched by Taconic Investment Partners and TH Real Estate resulted in a short sale since it sold for less than the mortgage balance upon receiving approval from lender MetLife.

And more recently in the past week,

• 444 Madison Avenue’s ground lease that also includes the adjacent 2-story 19 East 49th Street, is in contract for $50 million, having last traded in 2007 for $314 million. Located in the Plaza District, Savanna and Summit Properties are the contract vendees for the ground lease of the approximately 401,686-square-foot building. Lender Wells Fargo took control of the property after the former ground lessee defaulted on a $120 million loan, ultimately agreeing to the short sale deal.

• 3 East 54th Street was sold to an undisclosed buyer for reportedly $188 million. Cohen Brothers Realty reportedly owned a 63% stake in the 283,465-square-foot building located in the Plaza District. The article by The Real Deal indicated that the property “carried an $85 million mortgage and was valued internally at a net of $109 million.”

• 366 Madison Avenue is in contract to sell for $50 million to the Sioni Group. The seller, Inditex fashion group founder Amancio Ortega is taking a nearly 57% loss, having paid $115.5 million in 2006 for the 84,518-square-foot building located in the Grand Central area on the corner of East 46th Street.

Fueling the uptick of investment sales are fundamentals that are strong enough to spark a capital market’s wake-up call. Industry data provided in the recent article by the Commercial Observer indicated that “deal volume for large office buildings is up 130% in Manhattan year-over-year, and $897.5 million in office sales have already been recorded during the second quarter of 2025, representing a 36% increase for the previous quarter.” Furthermore, leasing activity is “performing incredibly well” with several big block signings since the start of the year led-off by Jane Street Capital’s 943,385-square-foot renewal and expansion lease at 250 Vesey Street within Lower Manhattan’s Brookfield Place complex, followed close behind by Deloitte’s commitment for 800,000 square feet at the yet-to-be constructed 70 Hudson Yards. Several office-to-residential conversions in different stages of planning and construction are also helping the office market, prompting displaced tenants to search for new space, thereby helping absorption. Return-to-office mandates adds another major factor that is boosting office investors’ confidence, “New York City’s attendance rates midway through 2025 exceeded the national rate by 8% and outperformed any other U.S. city according to a recent industry report.

Source:    https://commercialobserver.com/2025/09/manhattan-office-building-sales-leasing/