- RXR has signed a letter of intent to purchase 590 Madison Avenue from STRS Ohio for close to $1.1B.
- This is NYC’s first office deal to exceed $1B since Google’s 2022 acquisition of 550 Washington Street for $1.97B.
- The deal signals renewed activity in the high-end office market after years of limited trophy transactions.
A Billion-Dollar Comeback
According to The Real Deal, Scott Rechler’s RXR is reasserting its presence in the Manhattan office market with a landmark deal: the nearly $1.1B acquisition of 590 Madison Avenue.
The 42-story office tower, located in the prime Plaza District, becomes the first New York City office building to trade for over a billion dollars since Alphabet’s Hudson Square buy in 2022.
Competitive Bidding Returns
The sale drew serious interest from major players including Tishman Speyer, SL Green, Blackstone, and RFR, as well as a European high-net-worth investor. Several considered alternative deal structures such as installment payments, but RXR ultimately emerged as the winning bidder with a full-price offer.
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About the Property
Originally built in 1983 as IBM’s headquarters, the 1M SF tower is currently 85% leased. Over the past decade, seller STRS Ohio invested $80M into capital improvements, including a new roof deck and modern amenity spaces, which likely helped the building maintain its trophy status in a challenging office market. The deal was brokered by Eastdil Secured, led by Will Silverman and Gary Phillips.
Signs of Life in Trophy Office Deals
The acquisition of 590 Madison reflects a tentative return of investor appetite for prime Manhattan office assets. RXR has been increasingly active, including buying into 1211 Sixth Avenue earlier this year. Other recent moves include SL Green’s purchase of 500 Park Avenue and Tishman Speyer’s contract on 148 Lafayette Street.
Why It Matters
This transaction could signal a turning point in the city’s beleaguered office market. With limited trophy assets trading in recent years, a billion-dollar sale may encourage other institutional investors to re-enter the fray. Despite broader office market challenges, demand for stabilized, Class A properties in top locations appears to be holding strong.
What’s Next
As office fundamentals continue to evolve, high-end assets with strong tenancy and amenities remain competitive. RXR’s latest acquisition could mark the beginning of a new chapter in Manhattan office investing — one where quality and location remain paramount amid selective capital deployment.
