Feb 26, 2025
The Manhattan office market is showing strong signs of resilience, and Blackstone, the world’s largest alternative asset manager, is making major moves that reinforce this recovery. The firm’s recent interest in acquiring a significant stake in 1345 Sixth Avenue, a property currently owned by a joint venture of Fisher Brothers and investors advised by JP Morgan Asset Management, is a powerful signal of confidence in the city’s commercial sector.
This potential deal follows Blackstone’s expansion at 345 Park Avenue last summer, where it signed the largest office lease in Manhattan for 2024, increasing its footprint from 720,000 square feet to over 1 million square feet. It’s a notable shift from the firm’s previous stance of reducing exposure to office properties in favor of tech and industrial investments.
The renewed interest from Blackstone reflects a broader recovery trend in the commercial real estate sector. According to Avison Young, Manhattan investment sales surged in Q4 2024, reaching $1.6 billion—marking a 98% increase over Q3 and a 110% increase over Q4 2023. While total sales are still below 2019 levels, the upward trajectory is clear.
Not only is investment picking up, but leasing activity is also gaining momentum. VTS, a leading real estate tracking service, reported that demand for office space in Manhattan in November exceeded pre-pandemic 2019 levels for the first time. With work-from-home trends stabilizing, companies are once again prioritizing prime office locations.
JLL’s report supports this sentiment, stating that top-tier office buildings have seen vacancies drop below 10%, and availability has stabilized between 16% and 17%. The growing demand for high-end office space is evident, with a record 28 leases in 2024 surpassing the $200 per square foot mark and an unprecedented 212 leases exceeding $100 per square foot.
The renewed interest from major institutional investors like Blackstone, coupled with increased leasing activity, suggests that Manhattan’s office market is on a strong recovery path. With high-profile tenants like law firm Paul Weiss set to move into 1345 Sixth Avenue in 2027—securing 765,000 square feet in one of the largest leases of 2023—confidence in high-end office properties continues to grow.
For investors and businesses, the window for securing premium office space at competitive prices may be closing soon. As demand rises and vacancy rates shrink, the landscape of Manhattan’s commercial real estate sector is set for an upward trajectory, making now a crucial time for those looking to enter or expand in the market.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
