- Rithm Capital closed a joint venture with a DRA Advisors fund at 1301 Avenue of the Americas, keeping majority ownership and operating the fully leased, 45-story Midtown tower.
- Manhattan vacancy fell to 12.6% from 14.7% a year earlier through the third quarter and asking rents hit $84.56 per square foot, though Midtown East still sits at 16.9% vacancy.
- Rithm says buyers favor credit tenants, long lease terms and amenities, and it plans more capital partnerships across its Elecor portfolio as tighter space gives landlords rent leverage.
Investors are still paying up for fully leased Midtown office space, and Rithm Capital’s joint venture with DRA Advisors at 1301 Avenue of the Americas is the latest sign, according to Institutional Real Estate, Inc. (IREI).
Rithm keeps majority ownership through its Elecor Properties platform and continues to operate the 45-story tower. IREI says financial terms weren’t disclosed.
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What Investors Are Buying
Jonny Nierenberg, a Rithm vice president, told IREI that buyers want credit tenants, a long weighted average lease term, a strong amenity and a prime location. In his view, 1301 has all four.
He described two camps of buyers. One prizes yield on cost: strong NOI and modest capital needs that produce steady cash-on-cash returns.
The other plays the rent-growth story, buying space with in-place rents below market and pushing them at expiration, Nierenberg told IREI.
Inside 1301
The 1.7M SF tower is fully leased. Tenants include KeyBank, Piper Sandler, Crédit Agricole and O’Melveny & Myers.
The building also houses The Aurelian, a renovated 32,000 SF private club.
CRE Daily reported on Oct. 5 that DRA was taking a 49% stake at a $1.3B valuation, citing Commercial Observer. That brief said Rithm would hold the 51% majority.
Zoom Out
JLL data cited by IREI shows Manhattan leasing reached 25.7M SF through the third quarter, up 2.3% from a year earlier. Vacancy dropped to 12.6% from 14.7%, and net absorption approached 4.9M SF.
Direct asking rents rose to $84.56 per SF. CRE Daily’s brief on Manhattan office vacancy flagged that 12.6% as the lowest since before 2020, with limited new supply as the main constraint.
The recovery is uneven. Vacancy sits at 7% in Hudson Yards, 7.3% at the World Trade Center and 9.7% in the Midtown Core, versus 16.9% in Midtown East.
Why It Matters
Tighter availability is shifting leverage to landlords. Nierenberg told IREI that competition for space lets owners like Elecor raise rents and lift NOI, while existing tenants are opening renewal talks earlier in strong class A submarkets.
He also said activity across recapitalizations, refinancings and sales has picked up, with demand across the capital stack. Closing in a higher-rate environment, he told IREI, signals that investors want to work with strong operators.
What’s Next
Rithm plans similar capital partnerships across Elecor, which it acquired in December 2025 along with class A offices in New York and San Francisco.
The company has put money into capital improvements across the portfolio since then, IREI reports.
