NEW YORK — Real estate investment firm RXR has completed Manhattan’s largest office purchase in more than three years, acquiring the 42-story Class A skyscraper at 590 Madison Ave.—formerly known as the IBM Building—for $1.08 billion.

The seller, the State Teachers Retirement System of Ohio—one of the largest U.S. pension funds—confirmed the deal on Thursday. CoStar data shows this is the biggest Manhattan office transaction since March 2022, when Blackstone bought a 49% stake in One Manhattan West, valuing that property at $2.85 billion. RXR also describes it as the largest “full asset, non-user driven” acquisition in the city’s office market since March 2018.

The 1 million-square-foot tower, located in Manhattan’s prestigious Plaza District, has been a focal point for high-end leasing activity. RXR noted the building has attracted over 300,000 square feet of new leases in recent months, a sign of strong demand for prime locations. Tenants include Apollo Global Management, Tiger Management, and luxury fashion brand Louis Vuitton. Apollo recently signed a 96,000-square-foot lease in April.

Retail space at the property features “high-street retail exposure,” hosting tenants such as luxury jeweler Bucherer. The building has undergone more than $100 million in renovations, including a $400+ million, 21,000-square-foot amenity suite known as the Madison Avenue Club, which offers premium services to tenants.

“This acquisition is a key part of our office recovery strategy,” RXR said in a statement, explaining the approach focuses on acquiring Class A trophy assets at significant discounts to peak valuation. The firm targets properties being sold by institutional owners reducing their office exposure, aiming for what it calls “long-term winners” in an office market increasingly split between high- and low-quality assets.

Market analysts note the deal underscores a broader trend: trophy properties near transit hubs in the Plaza District and Grand Central area are outperforming the rest of the market. Leasing volumes there are now at or near pre-pandemic levels. According to CoStar’s analysis, “leasing momentum is being fueled by a relative sense of urgency as office tenants compete for a shrinking pool of top-tier space.”

RXR also announced an expanded partnership with Liberty Mutual Investments, with plans to deploy $1 billion into credit opportunities, including senior loans and construction financing. The 590 Madison Ave. acquisition was executed in partnership with Elliott Investment Management and financed through a senior mortgage provided by Apollo Global Management. Eastdil Secured represented the seller, while Newmark served as RXR’s equity capital adviser.

The purchase is being closely watched in real estate circles as a sign of renewed confidence in Manhattan’s prime office market. With a location at the intersection of Madison Ave. and 57th St., the property sits in one of the world’s most prestigious commercial corridors, offering tenants both prestige and accessibility.

Originally reported by Andria Cheng in Co Star.