- Paramount (PARA) retained a 55% controlling interest in 900 Third Ave, a 600 KSF, LEED Gold-certified office tower, while selling a 45% stake to an undisclosed buyer.
- The deal values the Midtown property at $210M, or approximately $350 PSF—significantly lower than its pre-pandemic market potential.
- While the Manhattan office market still faces headwinds, leasing ended 2024 on a high note, with increasing demand for Class A properties.
Paramount Group (PGRE) sold a 45% stake in its Midtown Manhattan office tower (900 Third Ave.) in a deal that values the 36-story property at $210M, as reported by CommercialEdge.
Deal Details
Paramount Group offloaded their 45% interest in the 36-story Class A office tower in Manhattan’s prestigious Plaza District for around $350 PSF.
Notably, Paramount acquired the building in 1999 for $163.2M, and still retains a 55% controlling stake. They will continue to manage and lease the trophy office tower.
The sale is part of a strategic move to boost Paramount’s balance sheet and enhance its ability to allocate capital. The buyer has not yet been identified.
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Private Showing
Completed in 1983, 900 Third Ave. was designed by renowned architects Cesar Pelli, Viñoly Design Architects, and Emery Roth and Sons. The LEED Gold-certified tower boasts:
- Floorplates: 44 KSF, offering abundant light and exceptional views
- Location: Access to 8 subway lines and Grand Central Terminal
- Tenant mix: Notable occupants include Littler, White Oak Healthcare Finance, Bank of America, Virtu Financial, and Amber Capital Investment Management.
- Vacancies: The tower has an 83% occupancy rate, with 237.7 KSF of office space and 14.8 KSF of retail space available.
Recovery in Sight?
The Manhattan office market has seen significant post-pandemic challenges, with plummeting property values and higher vacancies.
Paramount previously attempted to sell 900 Third Ave. in early 2020 for $400M, but the deal fell through as the pandemic disrupted the entire office sector.
However, signs of recovery are emerging. According to Cushman & Wakefield, Manhattan’s office leasing market ended 2024 on a strong note, with 6.7 MSF of new leasing in Q4, the highest quarterly total since 2022. Demand for high-quality, Class A office buildings also remains robust.
- Recent deals: In November, SL Green Realty (SLG) sold an 11% interest in One Vanderbilt, a 1.7 MSF Midtown skyscraper valued at $4.7B.
- Major lease activity: Bloomberg LP renewed and expanded its lease at 919 Third Ave., bringing its footprint to 924.9 KSF.
Why It Matters
Paramount’s partial sale of 900 Third Ave. underscores a broader trend in the Manhattan office market: owners seek creative solutions to unlock value amid a slow recovery.
Despite challenges, demand for high-quality Class A office properties in prime locations remains strong, as revealed by recent leasing and investment activity.
