In a landmark deal for Manhattan, N.Y., real estate investment firm RXR has purchased the 42-story, Class A skyscraper at 590 Madison Ave. for approximately $1.1 billion. This marks the largest Manhattan office space acquisition in more than three years.
The sale price is the highest seen in the New York City office market since Google’s parent company, Alphabet, acquired 550 Washington St. for almost $2 billion in 2022. That 1-million-square-foot property, previously known as the IBM Building, was sold by the State Teachers Retirement System of Ohio, which had owned it for nearly 30 years after acquiring it for $202 million.
Notably, the Madison Avenue property, situated in the prestigious Plaza District, has been a hub for high-end leasing. According to RXR, the building has drawn more than 300,000 square feet in new leases in recent months, demonstrating strong demand for prime locations. It has also undergone more than $100 million in renovations, including a new $400+ million, 21,000-square-foot amenity suite known as the Madison Avenue Club.
Tenants include Apollo Global Management, which signed a 96,000-square-foot lease in April, as well as Tiger Management and Louis Vuitton. Additionally, the ground-floor retail space features “high-street retail exposure” with a tenant roster that includes luxury jeweler Bucherer.
In a separate announcement, RXR revealed an expanded partnership with Liberty Mutual Investments, through which they plan to deploy $1 billion for credit opportunities, including senior loans and construction financing. However, the 590 Madison Ave. acquisition itself was a partnership with Elliott Investment Management and was financed with a senior mortgage from Apollo Global Management. Eastdil Secured represented the seller, while Newmark advised RXR on equity capital.
Real estate experts are closely watching this purchase as a sign of renewed faith in Manhattan’s top-tier office market. RXR stated that the deal fits its “office recovery strategy,” which involves buying Class A and trophy properties at a discount. The firm believes these assets will become “long-term winners,” especially as the supply of quality office space in Manhattan shrinks and demand remains strong.
