- Pontegadea, the family office of Zara founder Amancio Ortega, is selling 366 Madison Ave. for about $50M, a 57% drop from its 2006 purchase price of $115.5M.
- The buyer is Sioni Group, a New York-based real estate firm, according to sources familiar with the deal.
- The sale reflects the ongoing struggles of the Manhattan office market amid higher interest rates, remote work trends, and falling demand for older office buildings.
A Strategic Exit
Amancio Ortega’s Pontegadea is reportedly under contract to sell a 12-story office building located at 366 Madison Avenue. The property is situated near Grand Central Terminal. The sale price is expected to be roughly $50M, reports Bloomberg. The firm originally acquired the property in 2006 for $115.5M, meaning the sale would represent a steep 57% discount.
The brokerage handling the sale, Eastdil Secured, declined to comment on the deal. Pontegadea and Sioni Group have not responded to requests for comment.
Context: Office Market Reset
The heavily discounted sale points to broader issues plaguing the New York City office market. Demand for older, Class B and C buildings has dropped significantly in the wake of the pandemic, as companies prioritize newer, amenitized spaces or embrace hybrid work.
Buildings that once attracted premium valuations are now seeing steep declines in pricing. Ortega’s move to offload the property suggests a recognition that recovery in parts of the office sector may be long and uneven.
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Pontegadea’s Global Portfolio
Despite the markdown in Manhattan, Ortega’s real estate investment firm remains active globally. In early 2024, Pontegadea bought Hotel Banke in Paris for €97M (about $113M) and a commercial property on Barcelona’s Diagonal Avenue.
Ortega, who founded Inditex SA—the parent company of Zara—has built a real estate empire spanning the US and Europe. His net worth is estimated at over $104B, according to the Bloomberg Billionaires Index.
Why It Matters
High-profile sales at major discounts signal that even deep-pocketed investors like Ortega are reassessing their US office exposure. The market correction underway in Manhattan continues to pressure landlords, especially those with aging buildings in less-than-prime locations.
With more institutional players stepping back, distressed assets could change hands at accelerated rates in the coming months.
What’s Next
More write-downs and discounted sales may be on the horizon as office values adjust to post-pandemic realities. Investors are actively pursuing opportunities at reset prices, while longtime owners face tough decisions about whether to sell or hold.
