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.
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 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.”
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.
In a separate column in The Post on Sunday about Canal Street, I wrote that last week’s ICE raid cleared out the sidewalk hustlers “at least for now.” But “now” didn’t last long.
On Saturday, the sidewalks – including on the raided block between Lafayette and Centre streets – were again near-impassable with cheap clothing and fake “designer” watches.
Until the city finds the courage to cleanse Canal of the plague, legitimate large retailers will continue to shun the street’s western portion – leaving landlords short of the rent revenue they need to redevelop decayed old buildings.
