Investors are rushing back into New York City’s office market, injecting billions of dollars into property developments and signaling a revival in the wake of pandemic-era slowdown. Owners of four skyscrapers have recently tapped the commercial mortgage-backed securities (CMBS) market to refinance debts, raising $3 billion, according to documents reviewed by the Financial Times and data from Bank of America.
This activity has lifted CMBS borrowing tied exclusively to New York offices to $11 billion this year, marking the highest level since 2021, before the Federal Reserve’s interest rate hikes. Notably, investors are financing not just premier “trophy” properties but also older towers, suggesting confidence in highly leased buildings across business corridors like Sixth and Park Avenues, Times Square, and near Pennsylvania Station.
“Office is back,” said Mario Rivera, head of asset-backed securities at Fortress, pointing to corporate policies demanding a return to in-person work as a driving factor. Developers have closed more than 20 CMBS financings for office-only properties this year, up from just eight in 2024, highlighting growing investor appetite.
Key deals include Paramount raising $900 million for 1301 Sixth Avenue, Blackstone securing $850 million for 1345 Sixth Avenue, Vornado refinancing Apple’s New York headquarters for $450 million, and the Durst Organization obtaining $1.3 billion for the old Condé Nast and Skadden towers, now leased to tenants such as TikTok.
While the rebound signals stabilisation in New York’s office debt market, investors caution that the recovery is uneven. Financing remains concentrated on buildings with high occupancy and blue-chip tenants, while older or unrenovated properties continue to face challenges. Lower leverage ratios and increased equity contributions from developers reflect lenders’ heightened caution.
“People are looking at availability in Park Avenue offices or Central Park view offices and are saying we can lend on this again. Two blocks over, it gets pretty ugly,” said Ben Hunsaker, head of structured credit at Beach Point Capital.
The resurgence is further supported by declining vacancy rates and increased weekday subway usage, with daily rides nearing 72% of pre-pandemic levels, suggesting office districts are seeing renewed foot traffic.
