Manhattan’s premier office district is about to get one of its biggest tests since the start of the pandemic.
JPMorgan is putting up for sale its stake in the 44-story office tower at 605 Third Avenue — the first big trophy office listing to come to market in the Plaza District since Covid-19 hit.
The bank’s asset management arm is looking to sell its 49 percent stake in the circa-1963 tower it co-owns with Fisher Brothers, according to marketing materials reviewed by The Real Deal.
JPMorgan Asset Management is eying pricing that would value the entire 1.1-million-square-foot building between East 39th and East 40th streets at about $600 million.
Part of the marketing strategy highlights the property’s location in the Grand Central Terminal subdistrict, which the pitch says is positioned to benefit from the millennial migration to the suburbs in the middle part of this decade, a trend brokers say is being accelerated by the coronavirus.
A spokesperson for JPMorgan did not immediately respond to a request for comment. Eastdil Secured has the listing; a representative for the real estate investment bank declined to comment.
Fisher Brothers and its partners have made more than $100 million in upgrades to the building since 2014. It’s currently 97 percent leased with a weighted average of nine years left on those deals’ terms. A teaser for the offering says the landlords have collected 100 percent of rents since April.
JPMorgan bought its stake in the building in 2015 from the real estate private equity firm Rockpoint Group, which at the time also sold its interest in another building it co-owned with Fisher Brothers at 1345 Sixth Avenue. The deal valued both properties at $2.7 billion.
While a few large office properties have come up for sale in recent months, JPMorgan’s offering is the first to come to market in the Grand Central area. In recent years the subdistrict has been challenged to maintain its stature as competition from areas such as the Far West Side and the Financial District have drawn tenants out of the core of Midtown, including tech companies and financial firms.
The area got a shot in the arm when the city rezoned a site near the transit terminal to pave the way for SL Green Realty’s One Vanderbilt, which opened last month. The larger rezoning of Midtown East was geared toward bringing more commercial tenants back to the area.
Still, the biggest uncertainty is if and when companies will begin returning their employees to Manhattan’s office buildings, and how much demand there will be for office space post-Covid.