Blackstone nears major deal for NYC office tower in latest sign of post-COVID real estate comeback

Blackstone, the world’s largest alternative asset management firm, is all-in on Manhattan’s turnaround after the COVID pandemic crippled the commercial real estate market. The firm’s effort to buy 1345 Sixth Ave.from Fisher Brothers was widely hailed this week as a stroke of faith in the Manhattan office market — but it wasn’t the first mega-deal by the financial giant.Last summer, Stephen A.

Schwarzman-led Blackstone also signed the largest Manhattan office lease of 2024 at Rudin’s 345 Park Ave., where it decided to renew and expand from 720,000 to over 1 million square feet.Both moves reflect a change of heart by Blackstone, which said last year it was focusing less on office properties than on tech and industrial investments.Blackstone’s pivot signals a remarkable — and to some analysts, unexpected — overall resurgence in the Manhattan office market, which many gave up for dead after the pandemic.If the not-yet-certain 1345 Sixth purchase, first reported by Bloomberg, goes through, it would accelerate a turnaround in the investment-sale market, which saw $1.6 billion in total sales in the fourth quarter of 2024 — up 98% over the third quarter and 110% above the fourth quarter of 2023, according to Avison Young.The sales were still well below 2019 totals, but the upward trend is clear, driven in part by reduced building values due to rising interest rates and overhanging debt.“There are a lot of bargain hunters out there but they’d better move fast because the bargains won’t last,” said one investment-sale broker who didn’t want to be named.Financial terms for the prospective 1345 Sixth deal were not disclosed.Things are even more upbeat on the leasing front, where landlords and tenants have “put work-from-home in the rear-view mirror,” a JLL report said.Tracking service VTS reported this week that office space demand in the Big Apple increased in November to more than in pre-pandemic 2019 for the first time.The survey, w...