Owners Ditch Conversion at 745 Fifth, Keep Office Use

The owners of 745 Fifth Avenue are waving the white flag on a residential conversion and recommitting to offices, a pivot that underscores how far Manhattan’s top-tier office market has clawed back.

Rithm Capital and the von Finck family abandoned plans to turn the Plaza District tower into apartments last year, according to a recent Fitch Ratings report detailed by Crain’s. Instead, the partners are moving forward with a $275 million refinancing that includes nearly $40 million of fresh equity and another $25 million earmarked for future leasing costs, capital improvements and other expenses.

The prewar, 470,000-square-foot building was about 37 percent vacant as of October, featuring roughly 200,000 square feet of office space to fill. The retail portion is spoken for: Bergdorf Goodman’s men’s store occupies the base. Upstairs, tenants enjoy Central Park views.

Control of 745 Fifth changed hands last month when Rithm acquired Paramount Group, which bought the building in 2002 for $263 million. Paramount had previously explored conversion options, part of a broader wave of Midtown landlords testing whether obsolete offices could pencil out as housing.

Rithm declined to spell out why the conversion was shelved, but costs loom large. The city comptroller’s office has pegged the conversion of 750 Third Avenue at $663 per square foot. Applied to 745 Fifth, that kind of pricing would push a resi overhaul north of $300 million.

Instead, ownership is betting that spectacular views and the building’s Fifth Avenue address — across from the Plaza Hotel and next door to LVMH’s new tower — will be enough to pull in tenants willing to pay for prime Midtown space.

In a statement, Rithm said it sees “strong demand for high-quality space” and expressed confidence in the long-term fundamentals of New York’s premier office corridors.

That optimism isn’t happening in a vacuum. Manhattan leasing hit 42 million square feet in 2025, the busiest year since before the pandemic, according to Colliers; volume was up 25 percent from 2024.

While large swaths of older office inventory remain distressed, trophy assets in elite locations have been telling a different story.

— Holden Walter-Warner