- Castle Hook Partners will pay $375 per SF for the two-story penthouse at Related’s 625 Madison Ave., the third New York record this year, per JLL.
- Eleven companies have signed Manhattan leases above $300 per SF in 2026, and trophy vacancy ended Q3 at 4.9%, while Class-A asking rents hit a record $85.45 per SF.
- Manhattan has almost 10M SF under construction, up from 7.7M SF in June, but deliveries are years away, so scarcity at the top of the market is likely to persist.
Hedge fund Castle Hook Partners agreed to pay $375 per SF for the two-story penthouse atop Related Cos.’ 625 Madison Ave., setting a new Manhattan office rent record, according to Bisnow and JLL. It is at least the third record this year.
Castle Hook is one of 11 companies to sign Manhattan leases above $300 per SF in 2026, a level that was nearly unheard of before this year.
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A Run of Records
Last month, Sentinel Capital Partners paid $340 per SF, per JLL, to expand by 7K SF on the 54th floor of SL Green’s One Vanderbilt. That would have been a record if not for Castle Hook.
One Vanderbilt briefly held the record in March when Nscale paid $320 per SF for 7,204 SF, and Soloviev Group then announced $327.50 per SF at 9 W. 57th St.
The Details
Castle Hook plans to move from BXP’s General Motors Building at 767 Fifth Ave. when 625 Madison delivers in 2029. The Financial Times reported it is expected to pay more than $21M a year in rent.
Scarcity at the Top
Trophy vacancy was 4.9% at the end of Q3, per JLL, and Colliers reported Class-A asking rents at an all-time high of $85.45 per SF. JLL’s Evan Margolin called it a scarcity issue, as tenants will pay up for the best buildings.
Pipeline projects such as 625 Madison, 70 Hudson Yards, 570 Fifth Ave., 346 Madison Ave. and 343 Madison Ave. are not included in asking-rent averages, which sets up sticker shock for tenants. The pattern adds to CRE Daily’s coverage of how Manhattan office rents are rising beyond trophy buildings.
Why It Matters
The flight to quality is now squeezing tenants. Kirkland & Ellis added 52K SF at 900 Third Ave., and Evercore took space at 599 Lexington Ave. because its headquarters had no room to grow, Margolin said. AI firms are crowding Midtown South, and Anthropic leased all 466K SF at 330 Hudson St. last quarter.
The squeeze fits a market that has recovered pandemic occupancy losses in Midtown.
What’s Next
Manhattan has almost 10M SF under construction, up from 7.7M SF at the end of June, and every project that has broken ground has an anchor tenant. The next start could be Tishman Speyer’s 99 Hudson Blvd., where Sony is reportedly in talks for nearly half the building, per Commercial Observer. Relief for tenants is still years away.
