RXR Strikes First $1B+ NYC Office Sale Since 2022

In a rare post-pandemic blockbuster, RXR is under contract to buy the Plaza District trophy tower for nearly $1.1 billion.

Jordan B.
May 20, 2025

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Good morning. In a market still feeling post-pandemic drag, RXR’s nearly $1.1B deal for a Midtown trophy tower signals renewed investor appetite for best-in-class assets.

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Market Snapshot

S&P 500

GSPC

5,963.60

Pct Chg:
+0.70%

FTSE NAREIT

FNER

777.52

Pct Chg:
+1.12%

10Y Treasury

TNX

4.455%

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SOFR

30-DAY AVERAGE

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Pct Chg:
-0.00

*Data as of 05/17/2025 market close.

DEAL OF THE DAY

RXR to Acquire 590 Madison in NYC’s First $1B+ Office Deal Since 2022

RXR's Scott Rechler and 590 Madison Avenue (TheRealDeal)

In a rare post-pandemic blockbuster, RXR is under contract to buy the Plaza District trophy tower for nearly $1.1 billion.

Under contract: RXR, led by Scott Rechler, has signed a letter of intent to acquire 590 Madison Avenue from the State Teachers Retirement System of Ohio for just under $1.1 billion. The 1 million-square-foot tower, built in 1983 and originally IBM’s headquarters, marks the first New York City office sale to cross the billion-dollar threshold since Google parent Alphabet purchased 550 Washington Street in 2022 for nearly $2 billion.

Competitive bidding: The deal attracted a deep bench of suitors, including Tishman Speyer, SL Green, RFR, and Blackstone. While some bidders explored installment-based offers due to pricing concerns, RXR ultimately secured the property in a competitive full-sale process. Eastdil Secured brokered the deal on behalf of STRS Ohio.

Signs of life: Though high-priced by current market standards, the property is 85% leased and recently underwent $80 million in upgrades, including a rooftop deck and full-floor amenity space. RXR, which has ramped up activity in recent months—including taking a stake in 1211 Sixth Avenue—appears to be doubling down on prime Manhattan real estate with long-term upside.

➥ THE TAKEAWAY

Big picture: The acquisition signals renewed confidence in the high-end office market, even as broader office valuations remain under pressure. With many institutional players re-entering the field after years on the sidelines, the deal could be a bellwether for additional large-scale trades.

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✍️ Editor’s Picks

White-collar crime: Elie Schwartz, CEO of Nightingale Properties, faces sentencing after pleading guilty to wire fraud in a $63M crowdfunding scam, with victims demanding justice and restitution.
Shrinking schools: Regional universities across the US are losing students at an accelerating pace, triggering economic decline in college towns.
Platform merger: Blackstone has launched Perform Properties, merging ShopCore, EQ Office, and Retail Opportunity Investments into one 33 MSF platform.
Net lease rebound: Retail and industrial demand drove US net-lease investment to $9.6B in Q125, up 9% from last quarter and 21% YoY.
DC exclusivity: Washington, DC’s ultra-luxury housing market is dominated by rare inventory, legacy estates, and a tight-knit circle of elite brokers.

🏘️ MULTIFAMILY

Phantom buyouts: Years after NY’s 2019 rent law killed lucrative lease buyouts, many rent-stabilized tenants still don’t realize the money’s off the table.
Rent control: With affordability under strain and supply lagging, cities are taking sharply different paths on rent control.
Sales slowdown: US apartment transactions dipped in Q125 from late 2024 but still surged 36% YoY, with $30B in deals and standout trades topping $180M.
Historic clash: A revision to Florida’s housing law could pave the way for demolishing Miami Beach’s famed Art Deco buildings to make room for high-rise apartments.
Buyer freeze: Foreign investment in Miami condos has slowed sharply, with international buyers delaying purchases amid political uncertainty, trade tensions, and tighter financing conditions.
Building ambitions: Hilltop Residential is expanding into ground-up development with a new multifamily division, aiming to break ground on its first project within a year.

🏭 Industrial

Data fund: Blue Owl Capital closed its $7B Digital Infrastructure Fund III as it doubles down on AI-fueled demand for hyperscale data centers.
Data center debut: Backed by a $1B equity commitment, former Cumulus Data execs have launched PowerBridge to build hyperscale data center campuses across North America.
Power bottleneck: The Pacific Northwest’s data center boom has stalled as power grid constraints and slow infrastructure upgrades push developers to faster-growing markets.
Fulfillment center: Amazon has secured permits for a $51.5M distribution center in El Paso, marking another major investment in its Southwest logistics footprint.

🏬 RETAIL

Rite Aid reimagined: Rite Aid’s bankruptcy may signal retail decline, but its well-located properties are fueling a wave of creative reuse, from condos and clinics to gaming venues.
No price hikes: While others brace for cost hikes, Home Depot says it won’t pass tariff-related expenses to customers—and sticks to its full-year sales outlook.
Market consolidation: Dick’s Sporting Goods is acquiring Foot Locker for $2.4B, creating a 3,000+ store global platform and gaining access to new markets, customers, and real estate.
Tariff tipping point: Walmart's price hikes signal that tariffs, even at reduced levels, are now driving inflation across US retail.

🏢 OFFICE

Tower deal: Vornado Realty Trust and partner Albanese Organization have agreed to sell 512 West 22nd Street for $205M, using part of the proceeds to pay down a $123.6M loan.
Social media footprint: Pinterest is in talks to lease 80 KSF at 11 Madison Avenue, signaling a potential major office move in NYC’s Flatiron District.
Building Boston: Lego has opened its new 157 KSF US headquarters in Boston’s Back Bay, aiming to house 800+ employees and strengthen its American footprint.
Tenant influence: Dow Chemical is shaping the design of CityCentre Six, Houston’s largest office project underway, as anchor tenant demands redefine what gets built.

🏨 HOSPITALITY

Investment debut: First Hospitality launches First Investors and a $400M GP fund, opening its hotel investment platform to outside partners for the first time.
Casino partnership: Silverstein Properties has teamed up with Rush Street Gaming for its NYC casino bid, part of the proposed Avenir mixed-use project on Manhattan’s Far West Side.

📈 CHART OF THE DAY

Multifamily has proven to be the most resilient CRE asset class in volatile times, showing stronger demand recovery than other sectors, with Q1 demand up 12% YoY and net move-ins 40% above pre-pandemic levels.