Paramount Group has sold a 45 percent stake in 900 Third Ave., a 36-story, 600,000-square-foot Class A office building in Midtown Manhattan, in a deal that valued the trophy tower at $210 million.
The buyer was not identified. Paramount will retain the 55 percent controlling interest and continue to manage and lease the property located between East 54th and East 55th streets in the Plaza District submarket.
The deal strengthens the New York City-based office REIT’s balance sheet and gives the firm flexibility in its capital allocation strategy.
Paramount, which owns, operates, manages and redevelops high-quality Class A office properties in select New York City and San Francisco submarkets, acquired the tower from The Carlyle Group in November 1999 for $163.2 million, or about $274 per square foot, according to CommercialEdge data. The latest transaction values the property at about $350 per square foot.
Building highlights
The LEED Gold-certified building was designed by Cesar Pelli, Viñoly Design Architects and Emery Roth and Sons and completed in 1983. The tower has 44,000-square-foot floorplates, exceptional light and views, as well as a superior location that provides access to eight subway lines and Grand Central Terminal.
The multi-tenant building has an 83 percent occupancy rate and 237,680 square feet of office space available, according to CommercialEdge. The property also has 14,805 square feet of retail space on the first floor and the underground level.
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Current tenants include Littler law firm, White Oak Healthcare Finance, FirstKey Mortgage, Zweig-DiMenna Associates, Carl Marks Management Co., Bank of America, Virtu Financial, Bank Negara Malaysia, Amber Capital Investment Management and RE Loewenberg Capital Management, according to CommercialEdge data.
Manhattan office market moves
Paramount had planned to sell the building several years ago but a deal with Aby Rosen’s RFR Realty to buy the tower for about $400 million fell apart in early 2020 as the COVID-19 pandemic hit America, shutting down all offices across the nation. Since then, Manhattan, like many U.S. office markets, has struggled to regain its footing and property values for many office buildings have declined.
But there are signs of improvement in the Manhattan office market and Paramount believes the sale of the non-controlling interest in 900 Third Ave. underscores the underappreciated value of the asset.
Tenants continue to flock to high-quality, newly built or recently redeveloped towers. In November, SL Green Realty Corp. closed on the sale of an 11 percent interest in One Vanderbilt, the 1.7 million-square-foot skyscraper in Midtown Manhattan, to Mori Building Co. Ltd. The deal valued the tower at $4.7 billion. SL Green maintained a 60 percent stake in the skyscraper that is now fully leased. The property’s other owners include the National Pension Service of Korea and Hines.
Cushman & Wakefield reported office leasing ended 2024 on a strong note with fourth-quarter new leasing totaling 6.7 million square feet—the highest quarterly total since the third quarter of 2022 and 6.3 percent higher than the 10-year quarterly average. The fourth-quarter Manhattan office report also stated there were 23 new and expansion leases greater than 100,000 square feet, up from 16 in 2023.
In the largest lease of the fourth quarter, Bloomberg LP inked a renewal and expansion lease at SL Green’s 919 Third Ave., a 1.5 million-square-foot, 47-story office tower. The deal brings the global publisher’s footprint to 924,876 square feet at the Midtown Manhattan high-rise. Bloomberg agreed to a 749,035-square-foot, 11-year lease extension starting March 1, 2029, and a new 175,841-square-foot 15-year expansion.
