Law Firm Simpson Thatcher Joins Ikea at New Fifth Avenue Tower

Extell Development is close to a major deal as law firm Simpson Thacher & Bartlett is poised to lease a significant portion of its new Ikea-anchored tower at 570 Fifth Ave.

The law firm is expected to sign a lease for 700,000 square feet of Manhattan office space. This would be the second-largest office lease signed in New York this year, behind only New York University’s 1.1-million-square-foot deal at 770 Broadway.

Nationally, law firms have been a key driver of office demand, signing leases for nearly 6 million square feet in the first half of 2025 in the sector’s strongest performance since 2018.

This upcoming move brings into question the future of Simpson Thacher’s longstanding office at 425 Lexington Ave. The firm recently subleased some of its current space, which suggests that the new 570 Fifth location may serve as a replacement, rather than an addition to its existing Midtown offices.

Extell Development, led by Gary Barnett, is constructing a 29-story office and retail building with Ikea as its anchor tenant on Fifth Avenue. Projected to be completed by the end of 2028, the tower will occupy the entire block between West 46th and West 47th streets, an assemblage that took Extell a decade to piece together. The final part of the site was acquired just this past March for $175 million.

According to filings on the Tel Aviv Stock Exchange, Ikea is investing $292 million into the project’s construction. This development is also one of nine Extell projects that collectively received a $1.2 billion preferred equity investment from an undisclosed hedge fund.

For Barnett, this lease confirms a major change in strategy. Back in 2021, Extell had filed plans for a 78-story, mixed-use tower on the same property, which would have contained more than 1,500 hotel rooms and almost 500 apartments. Instead, the developer pivoted to focus on an office building and successfully secured financing from South Korea’s IGIS Asset Management to proceed with the project.