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lackstone, the world's largest alternative asset management firm, is betting big on Manhattan's recovery from the COVID pandemic. The company has made a major play in the city's office market with its bid to buy a significant stake in 1345 Sixth Avenue, a joint venture between Fisher Brothers and investors advised by JP Morgan Asset Management.

    This move follows Blackstone's largest Manhattan office lease of 2024 at Rudin's 345 Park Ave., where it expanded from 720,000 to over 1 million square feet. The firm had previously stated its focus was shifting away from office properties towards tech and industrial investments, but its recent moves suggest a renewed commitment to the Manhattan market.

    The Manhattan office market has seen a remarkable turnaround, with sales reaching $1.6 billion in the fourth quarter of 2024 - a 98% increase over the third quarter and 110% above the same period in 2023. While still below pre-pandemic levels, the trend is clear, driven by reduced building values due to rising interest rates and overhanging debt.

    On the leasing front, landlords and tenants have put work-from-home arrangements behind them, with office space demand increasing in November to surpass pre-pandemic levels for the first time. Law firm Paul Weiss is set to move into 1345 Sixth Avenue in 2027, taking 765,000 square feet of space.

    The building, which has undergone $120 million in capital improvements, is over 92% leased to tenants including Intercontinental Exchange and Fortress Investment Group. Vacancies in top-tier buildings have fallen to under 10%, with overall availability stabilizing at between 16% and 17%. The market's resurgence is reflected in a record number of new leases signed at rents above $200 per square foot, with Manhattan leasing volume reaching 35.9 million square feet in 2024 - just 10% below pre-pandemic levels.