Blue Owl Capital Expands Manhattan Office Presence to 239 KSF

RFR Realty has inked a lease expansion with Blue Owl Capital at The Seagram Building, an 891,998-square-foot office tower in Manhattan. The alternative asset manager expanded its 168,597-square-foot lease to 238,673 square feet. Cushman & Wakefield negotiated on behalf of the tenant, while RFR had in-house representation.

This is not the first time Blue Owl’s footprint has grown at The Seagram. Last year, the firm agreed to occupy an additional 31,597 square feet. The company had initially committed to 137,600 square feet in 2022 and has since nearly doubled its presence at the Class A+ property.

Including Blue Owl’s expansion, the office tower’s leasing commitments through year’s end total north of 350,000 square feet, which are set to bring its occupancy to nearly 100 percent. The tenant roster includes Fiera Capital, Centerbridge Partners and Clayton, Dubilier & Rice, among others.

A Class A+ office tower in Midtown Manhattan

RFR acquired The Seagram Building in 2001 from Nuveen Real Estate for $371 million, CommercialEdge information shows. Last year, the firm retired the property’s $1.1 billion debt dating back to 2013 through a $1.1 billion refinancing package, which included roughly $360 million in equity from JVP Management.

Designed by architects Ludwig Mies van der Rohe and Philip Johnson, the 38-story tower debuted in 1958. The high-rise features floor-to-ceiling windows, EV charging stations and bike storage, as well as floorplates ranging between 15,700 and 39,100 square feet. The tower is pursuing LEED and Fitwel certifications.

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In 2022, the landlord completed the 34,000-square-foot Seagram Playground, which encompasses sports-oriented facilities and a townhall with a capacity of up to 240 people. Additional amenities include a terrace lounge on the 11th floor, as well as three restaurant and event spaces.

Carrying the address 375 Park Ave., The Seagram Building is less than 4 miles from Downtown Manhattan. Central Park, Rockefeller Center and the Grand Central are within 1 mile.

Cushman & Wakefield Mark Weiss negotiated on behalf of Blue Owl Capital. RFR Realty Executive Vice President AJ Camhi alongside Senior Vice President Paul Milunec provided self-representation.

A company in expansion mode

In fact, Blue Owl’s new office lease is not its only recent expansion deal. The company recently joined a $3.4 billion joint venture with Crusoe Energy Systems and Primary Digital Infrastructure to develop a 206 MW, 998,000-square-foot data center in Abilene, Texas.

And last week, Blue Owl entered an agreement to pay approximatively $1 billion for IPI Partners—a digital infrastructure fund manager founded in 2016 by a joint venture between ICONIQ Capital and Iron Point Partners. IPI had roughly $10.5 billion assets under management in June.  

Manhattan office demand goes up as visits increase

At a national level, most return-to-office policies went unenforced, as only 17 percent of the companies that have them actively executed them. However, Manhattan’s office visits inch closer to pre-pandemic levels.

The increase in office drop-by rates is reflected in Cushman & Wakefield’s report for the third quarter as leasing activity witnessed a boost. Year-to-date as of September, Manhattan’s new office leasing activity clocked in at 16.7 million square feet—a 31.1 percent spike from last year’s figure during the same interval.

As a result, the borough’s overall vacancy rate dropped by 20 basis points over the quarter reaching 23.5 percent, the report shows. An additional factor in the vacancy’s dip was the lack of new office developments for two consecutive quarters. 

During the first nine months, renewals totaled 6 million square feet, up 38.3 percent over the year. In total, the borough’s office leasing activity reached 22.7 million square feet year-to-date through September—an increase of 33.1 percent year-over-year.

Should market conditions hold, Manhattan’s office market could overtake 2023’s full-year leasing activity by the end of October, according to the report.