After months of negotiations, 590 Madison Avenue, an office building that's adjacent to Trump Tower in Manhattan's Plaza District — has finally traded hands. RXR has won the bidding war.
The Real Deal reports, citing a source, that the purchase price is closer to the $1.1 billion range rather than $1 billion. Regardless, that would be the largest New York City sale since Google's parent company, Alphabet, in 2022 purchased 550 Washington Street for $1.97 billion, according to the news outlet.
The 590 Madison Avenue property has spurred nothing short of interest since Bloomberg reported in February that Eastdil Secured started marketing the property on behalf of the public pension fund and landlord, State Teachers Retirement System of Ohio. The Real Deal said that it appeared that Blackstone was the favorite in April to land the one-million-square-foot office tower before RXR emerged. Some others who were involved in the bidding included other major landlords SL Green, RFR, Tishman Speyer, as well as an unnamed "high-net-worth European investor," the CRE media company noted. There was concern over the high cost of the building and some explored a potential deal through installments. But the high competition in the negotiations ultimately led to a full sale.
Formerly, 590 Madison was known as the IBM Building. The 42-story Class A asset is now 85 percent leased and offers a mixed-use setting, which includes public spaces, retail and a floor dedicated to amenities.
Another big Manhattan office deal that could go down but perhaps not quite exceed the $1 billion price tag is Blackstone's potential buy of 1345 Avenue of the Americas in Manhattan. Reuters reported in February that the private equity giant was seeking an $800 million loan to fund the potential acquisition.
Nobody can dispute Manhattan's impressive office recovery since the onset of the pandemic. However, April represented a bit of a hiccup for the asset class. The city's recorded leasing volume of 3.38 million square feet was down 26.2 percent from the previous month, according to a report from Colliers. However, the category was up 23 percent year-over-year and 25.4 percent above the 10-year monthly median.
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