Apollo Grabs More 590 Madison Space as Part of Consolidation

Marc Rowan’s Apollo Global Management is subjecting Manhattan office owners to a game of musical chairs. One of the big winners so far? Scott Rechler’s RXR.

An unnamed affiliate of the alternative asset management firms signed a 10-year lease for 50,000 square feet at RXR’s 590 Madison Avenue in the Plaza District, the Commercial Observer reported. The lease covers the 14th and 15th floors, directly above other space Apollo recently scooped up.

The asking rent was not disclosed, but was reportedly above $120 per square foot. That’s a handsome premium from the average $95.68 per square foot ask the Plaza District had in the first quarter, according to Colliers.

CBRE’s Michael Wellen, Michael Geoghegan and Stephen Siegel represented the Apollo affiliate, while RXR’s William Elder and Daniel Birney represented the landlord in-house.

The deal came practically a year to the day of Apollo finalizing a lease for 100,000 square feet at the property. At the time, the building was owned by the State Teachers Retirement System of Ohio.

That changed several months later, when RXR closed a $1.08 billion purchase of the property, New York’s largest investment sale in three years. The deal was financed by none other than Apollo, which provided Rechler with $785 million in debt.

Clearly, Rowan is a believer in the building’s potential and his company’s employment base is moving in lockstep. Workers at 3 Bryant Park and 1350 and 1370 Sixth Avenue are set to relocate, either to 590 Madison or Apollo’s 185,000-square-foot headquarters at 9 West 57th Street.

Meanwhile, Apollo is looking to establish a second headquarters in the South, considering business-friendly locations for the expansion such as Florida, Texas —specifically Austin — and Nashville.

The firm said the decision is “driven by the talent we want to hire” and leadership expects most “future growth will take place in our second HQ.”

— Holden Walter-Warner