- Hedge fund Castle Hook Partners signed a $375-per-SF deal for the top-of-tower penthouse at Related’s 625 Madison, the highest-rent office lease in the city’s history, per JLL.
- It is one of 11 tenants committing above $300 per SF in Manhattan in 2026, and Sentinel’s $340 per SF at One Vanderbilt would have taken the record last month.
- Trophy vacancy is 4.9% and nearly 10M SF is under construction, but JLL’s Evan Margolin told Bisnow the new towers are years from delivery, so tenants face no near-term relief.
Hedge fund Castle Hook Partners has signed the costliest office lease ever recorded in New York City, with JLL data cited by Bisnow showing $375 per SF on the top-floor penthouse of Related’s new tower at 625 Madison Ave.
The two-story space sits atop a trophy tower still in development. Castle Hook plans to leave BXP’s General Motors Building when the new tower delivers in 2029, and the Financial Times reported annual rent above $21M.
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A Run of Records
Castle Hook joins ten others pledging above $300 per SF in Manhattan this year, a level that was nearly unheard of before 2026.
The record has changed hands repeatedly. In March, Nscale, which Nvidia backs, took 7,204 SF at One Vanderbilt at $320 per SF, and days later Soloviev Group disclosed $327.50 per SF at 9 W. 57th St. Last month Sentinel Capital Partners committed to $340 per SF to add 7K SF at One Vanderbilt, which would have been the record without Castle Hook.
Scarcity at the Top
Trophy vacancy ended the third quarter at 4.9%, per JLL. Vice Chairman Evan Margolin told Bisnow tenants will pay up to occupy the best buildings.
Colliers put Class A asking rents at a record $85.45 per SF in Q3, but Margolin said that understates the market. Unbuilt towers such as 625 Madison, 70 Hudson Yards and Extell’s 570 Fifth Ave. do not enter the averages, which leaves tenants shocked by what new space costs.
Flight to Quality Flips
After years of talk about a flight to quality, tenants needing Midtown space are now accepting compromises. Kirkland & Ellis added 52K SF at 900 Third Ave. beyond its main office at 601 Lexington Ave., and Margolin said Evercore moved into 599 Lexington Ave. because Park Avenue Plaza had no room to grow.
AI companies are crowding out smaller space users in Midtown South, Margolin said. Anthropic took every square foot of 330 Hudson St., or 466K SF, last quarter.
Supply Is Coming, Slowly
JLL counts almost 10M SF of Manhattan office space now under construction, versus 7.7M SF in late June. Every project that has broken ground has an anchor tenant, and deliveries are years off.
Tishman Speyer’s 99 Hudson Blvd. may be the next to start, with Sony reportedly negotiating for close to half of it, per Commercial Observer.
Why It Matters
Record rents are no longer limited to a few trophy deals. CRE Daily has tracked how Manhattan office rents jumped beyond the trophy tier as well.
The squeeze fits the broader recovery, as Midtown office availability fell back to its pre-pandemic level.
What’s Next
Margolin said it now makes sense for office towers to break ground, but they will not arrive quickly. Watch for the next pre-leased starts and whether another tenant tops $375 per SF before 625 Madison opens in 2029.
