Plaza District, Manhattan, New York, August 25, 2025
News Summary
RXR, in partnership with Elliott Investment Management, purchased the 42‑story Class A office tower at 590 Madison Ave for roughly $1.08–$1.1 billion. The acquisition, financed with a senior mortgage from Apollo Global Management and advised by Newmark and Eastdil Secured, is the largest single office building purchase in Manhattan in several years. The roughly 1 million‑square‑foot tower has seen more than $100 million in upgrades, including a 21,000‑sq‑ft amenity suite, and recent leasing has lifted occupancy to about 87%, underscoring demand for trophy Manhattan office assets as part of RXR’s Office Recovery Strategy.
RXR closes roughly $1.1B purchase of 590 Madison Ave., signaling renewed demand for Manhattan trophy offices
By Diana Sabau — August 25, 2025 · Commercial Real Estate News · Views: 0
A major Manhattan office tower changed hands in a deal that industry observers say is the largest office acquisition in the borough in more than three years. Real estate investment firm RXR acquired the 42‑story Class A tower at 590 Madison Ave. for approximately $1.1 billion (also reported in parts of the coverage as $1.08 billion).
The buyer closed the transaction in partnership with an investment manager and financed the acquisition with a senior mortgage provided by a global asset manager. The seller was the State Teachers Retirement System of Ohio, which placed the one‑million‑square‑foot property — long known as the former IBM Building — on the market after nearly three decades of ownership. The pension fund originally acquired the tower for roughly $202 million.
Key deal mechanics and advisers
The purchase was structured as a partnership between RXR and Elliott Investment Management and was financed with a senior loan from Apollo Global Management. Eastdil Secured represented the seller during marketing and sale. A Newmark team advised RXR on equity capital for the purchase, while specific Eastdil brokers were involved in the marketing process on behalf of the pension fund.
Why the deal matters
The sale is being viewed as the highest price paid for an office tower in New York City since a nearly $2 billion acquisition in 2022, and is widely read as a sign that demand for top‑tier Manhattan offices is reviving. The tower is considered among the biggest trophy assets put on the market since the pandemic and the deal is being followed closely by market participants as an indicator of confidence in prime Midtown product.
Building condition, tenants and leasing
The tower sits in the Plaza District on Madison Avenue between East 56th and 57th streets. It has undergone more than $100 million in capital upgrades, including the addition of a large new amenity suite described in reporting as a $400+ million, 21,000‑square‑foot Madison Avenue Club. Recent leasing momentum was cited as a key factor in the sale; RXR reported the building drew more than 300,000 square feet of new leases in recent months.
Named office tenants include Apollo Global Management, Tiger Management and Louis Vuitton. Reporting on recent leases lists one Apollo deal as roughly 96,000 square feet signed in April, while other coverage cites a recent Apollo lease at about 100,000 square feet, either of which helped lift the building’s office occupancy to about 87%.
Ground‑floor retail offers high‑street exposure and includes luxury jeweler Bucherer. A prominent auction house on the Madison frontage is set to vacate and move to another Midtown address next year, leaving nearly 28,000 square feet of retail space now being marketed by a global brokerage. Market sources note that in today’s strong luxury retail market, such a vacancy can be an asset.
Strategy and market context
RXR said the acquisition aligns with its office recovery strategy of buying Class A trophy properties at discounts to prior peak valuations and holding them as long‑term assets as high‑quality Manhattan supply tightens. The deal was characterized in some reporting as a distress sale; RXR framed it as consistent with a strategy focused on repositioning and leasing premium buildings.
The transaction arrives amid other large Manhattan moves. In the prior week, an investor paid about $810 million for a 33‑story rental tower at Fifth Avenue and East 61st Street and plans to demolish the existing building for a new high‑end condo project, which could require relocating or evicting more than 200 apartment tenants and has prompted tenant legal action in some cases. Those two monumental transactions back to back underscore increased activity at the top of the market.
Additional deal notes
- STRS Ohio had marketed the tower seeking roughly $1.1 billion.
- The $1.08 billion figure reported for the close was slightly below the seller’s asking price in some accounts.
- The tower had been managed by a New York real estate operator and experienced a dip in tenancy after a major tech tenant relocated two years ago.
- Market commentary notes the rarity of trophy assets trading at scale along the Madison and Fifth avenues corridors, where average hold periods exceed several decades.
- RXR also disclosed an expanded partnership with Liberty Mutual Investments to deploy $1 billion for credit opportunities, including senior loans and construction financing.
- The article line Comments are closed.
What this could mean going forward
Observers say the transaction may encourage further large purchases and recapitalizations of downtown and Midtown trophy offices, particularly where recent capital improvements and leasing have improved fundamentals. The mix of core equity partners, bank and nonbank financing, and continued appetite from capital allocators for well‑located, upgraded product is likely to shape deals in the months ahead.
FAQ
What property was sold?
The 42‑story, one‑million‑square‑foot tower at 590 Madison Ave., formerly known as the IBM Building, was sold.
Who bought the building and for how much?
Real estate investment firm RXR purchased the tower in a partnership with Elliott Investment Management for about $1.1 billion, with some reports listing the sale price at $1.08 billion.
Who sold the building?
The State Teachers Retirement System of Ohio was the seller; it had owned the property for nearly 30 years after buying it for about $202 million.
How was the deal financed?
The acquisition was financed with a senior mortgage from Apollo Global Management, with equity advised by a Newmark team and seller representation by Eastdil Secured.
What tenants and retail spaces are in the tower?
Office tenants include Apollo Global Management, Tiger Management and Louis Vuitton. Ground‑floor retail includes Bucherer and a large auction house space that will be vacated next year and is being marketed.
How does this deal affect the Manhattan office market?
The transaction is the largest Manhattan office purchase in more than three years and the biggest price point seen since a nearly $2 billion office acquisition in 2022, signaling renewed investor interest in top‑tier office assets.
Key deal facts at a glance
| Item | Detail |
|---|---|
| Buyer | RXR (partnered with Elliott Investment Management) |
| Seller | State Teachers Retirement System of Ohio |
| Address | 590 Madison Ave., Plaza District (East 56th–57th) |
| Building | 42 stories, ~1,000,000 sq ft, former IBM Building |
| Sale price | Reported ~ $1.1 billion (also cited as $1.08 billion) |
| Financing | Senior mortgage from Apollo Global Management; equity advised by Newmark |
| Recent capital work | More than $100 million in upgrades; amenity suite reported as $400+ million and 21,000 sq ft |
| Occupancy | About 87% after recent leasing |
| Notable tenants | Apollo Global Management, Tiger Management, Louis Vuitton, Bucherer (retail) |
| Advisers | Eastdil Secured represented seller; Newmark advised buyer on equity capital |
| Related market moves | Recent $810M purchase of 800 Fifth Ave. for condo redevelopment |
Deeper Dive: News & Info About This Topic
Additional Resources
- New York Post: Midtown showing strength with sale of apartment building, office tower
- Wikipedia: 590 Madison Avenue
- ConnectCRE: 590 Madison Ave listed for sale with ask of $1.1B
- Google Search: 590 Madison Ave RXR
- CommercialCafe: RXR $1 billion 590 Madison acquisition
- Google Scholar: 590 Madison Ave RXR
- Bisnow: Lender takes RXR’s 340 Madison Ave at auction
- Encyclopedia Britannica: RXR 590 Madison (search)
- Crain’s New York Business: 590 Madison goes on sale for roughly $1.1B
- Google News: 590 Madison Ave RXR
Author: Construction CA News
CALIFORNIA STAFF WRITER The CALIFORNIA STAFF WRITER represents the experienced team at constructioncanews.com, your go-to source for actionable local news and information in California and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rose Parade, Coachella, Comic-Con, and the California State Fair. Our coverage extends to key organizations like the California Building Industry Association and Associated General Contractors of California, plus leading businesses in technology and entertainment that power the local economy such as Apple and Alphabet. As part of the broader network, including constructionnynews.com, constructiontxnews.com, and constructionflnews.com, we provide comprehensive, credible insights into the dynamic landscape across multiple states.
