- Vornado Realty Trust’s joint venture has reached a $205M agreement to sell 512 West 22nd Street, a Class A office property in Manhattan’s Chelsea neighborhood.
- A portion of the proceeds will go toward repaying the building’s $123.6M mortgage loan.
- The deal is expected to close in Q3 2025 and reflects continued investor interest in stabilized Manhattan office assets despite mixed leasing trends.
A Strategic Sale
Vornado Realty Trust, through its 55% stake in a joint venture with The Albanese Organization, is selling the 11-story, 173K SF Chelsea office tower for $205M. The transaction is subject to closing conditions and is expected to be finalized in the third quarter of 2025, reports GlobeSt.
Debt Reduction Play
A significant portion of the sale proceeds will go toward repaying the building’s $123.6M mortgage loan, indicating a broader deleveraging effort by Vornado amid shifting office market dynamics.
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Prime Asset Profile
Located at 512 West 22nd Street, the Chelsea office building features large floor plates (up to 22,900 rentable SF), ceiling heights ranging from 12 to 24 inches, and a roster of high-profile tenants such as Warner Media, Kenneth Cole Productions, and IMG Worldwide. It also includes a retail tenant, Galeria Nara Roesler.
Contextual Backdrop
Vornado reported leasing 709K SF in New York in Q1 2025, with an average lease term of nearly 15 years. Office occupancy stood at 84.4% as of March 31. While April saw a leasing slowdown in NYC, year-over-year activity remained up 23%, signaling ongoing recovery momentum.
Market Implications
The sale highlights sustained investor appetite for well-leased, high-quality Chelsea office properties in top-tier submarkets. With pricing transparency and strong fundamentals, Chelsea continues to attract both institutional buyers and strategic sellers seeking balance sheet flexibility.
What’s Next
As the New York office market continues to stabilize, expect more selective asset sales and recapitalizations from REITs like Vornado, especially in high-demand areas with strong tenant rosters and long-term leasing performance.
