Manhattan Commercial Transactions Hit $5B in Latest Quarter
Introduction to Manhattan’s Commercial Market
The $1.25 billion refinancing of 3 Bryant Park last February wasn’t only good news for owner Ivanhoe Cambridge and the 1.2 million square-foot office tower.
Drew Isaacson, part of the JLL capital markets team that arranged the refi by Wells Fargo, Bank of America and Bank of Montreal, said it “kicked off the return of the high-end lending market,” which mostly sat on the sidelines as the office market struggled to recover from the pandemic.
Since the 3 Bryant Park deal “solidified that the lending market was open again,” Isaacson said, Manhattan has seen one major investment-sale transaction after another.
3 Bryant Park’s $1.25 billion refinancing was completed in February. REDA/Universal Images Group via Getty Images
Notable Transactions in Manhattan
The most notable was the $1.08 billion purchase of 590 Madison Avenue by RXR and Elliott Investment Management, the highest price paid for an office tower in more than three years.
In that transaction, Eastdil Secured represented the seller, an Ohio pension fund, while Newmark advised RXR. But there’s plenty of business to go around for other brokerages.
For example, Isaacson and JLL’s David Giancola handled the $160 million sale of the former Brooks Brothers Madison Avenue site and an adjacent property to SL Green, which closed last week, Isaacson said.
The $1.08 billion purchase of 590 Madison Avenue by RXR and Elliott Investment Management was the highest price paid for an office tower in more than three years. Brian Zak/NY Post
Market Trends and Analysis
The deals came in a third quarter that saw nearly $5 billion in Manhattan property sales, the highest for a single quarter since early 2022.
Of that, JLL reported, $3.3 billion were in office assets — nearly double the second-quarter activity and a 74% year-over-year jump over the $1.9 billion volume in the third quarter of 2024.
The year-to-date office volume was $7.1 billion.
“There’s now tremendous investor confidence in the high-quality office sector,” Isaacson said. “Balance-sheet lenders such as traditional banks and insurers were missing from the market, but they’re coming back. Pension funds and other institutions are starting to lend directly.”
The former Brooks Brothers Madison Avenue site was sold for $160 million in a deal that closed last week. J.C. RIce
Future Outlook
Noting that the largest recent buys were by publicly traded companies such as SL Green and Vornado, he said, “That cohort is now the dominant buying class, whereas twelve to twenty-four months ago, it was mostly private capital.”
Isaacson sees only continued energy in the investment-sale market. Nor was he concerned about potential changes on the government front. “The underlying strength of the city overrides politics,” he said confidently.
Conclusion
In conclusion, Manhattan’s commercial market has seen a significant surge in transactions, with nearly $5 billion in property sales in the latest quarter. The return of high-end lending and investor confidence in the high-quality office sector are driving this trend. As the market continues to grow, it will be interesting to see how it evolves and what opportunities and challenges arise.
FAQs
Q: What was the total value of Manhattan property sales in the latest quarter?
A: Nearly $5 billion.
Q: What was the value of office assets in the latest quarter?
A: $3.3 billion.
Q: What was the year-to-date office volume?
A: $7.1 billion.
Q: Who were the buyers in the notable transactions?
A: RXR and Elliott Investment Management, and SL Green.
Q: What is the outlook for the investment-sale market?
A: Continued energy and growth, driven by investor confidence and the return of high-end lending.
