Manhattan's office market continues to surprise with unexpected new leases and expansions, and now it's making the most unlikely move that no one expected.
Bridgewater Associates, the world's largest hedge fund manager, has signed a deal to open its first Manhattan office. The Westport-based company secretly closed on a 60,000-square-foot lease at 295 Fifth Avenue over the weekend, Realty Check has learned.
The former textile building occupies the entire east block between Route 30 West.th and waist 31cent street. Owners Tribeca Investment Group (TIG), PGIM Real Estate, and Meadow Partners spent $350 million to redevelop the 100-year-old, 700,000-square-foot property for modern office use. Upgrades include a new two-story penthouse, ground floor courtyard, terrace, and hospitality amenities.
Bridgewater's expansion into Manhattan comes after a smaller downsizing reported 18 months ago that cut 100 of 1,300 jobs. Most employees will remain in Connecticut, but the move to Manhattan will be the company's first location outside the state. CEO Nir Bar Dia, who succeeded founder Ray Dalio, has taken other steps to change the company's insular culture.
The talks were first reported by Bloomberg several weeks ago, but no deal had yet been reached. The size of the lease was previously unknown. No one wanted to talk to us, including JLL Brokers, which represented Bridgewater, and CBRE, which represented the landlord.
Bridgewater's lease reflects a major shift in leasing trends in Midtown South.
A new report from CBRE says the district has “evolved into a more balanced rental market” that includes financial and statutory tenants as the technology industry, long the dominant leasing sector, retreats.
A study by Michael Slattery and Jared Koeck says the search for more diverse industries in Midtown South is “a return to the typical situation before the rise of technology from 2014 to 2019.” .
CBRE said the supply upgrades and additional amenities “will benefit a broader tenant mix.” And with availability tight for trophy properties across Manhattan, “Midtown South is poised to capture the spillover demand.”
Tech sector leasing activity in the submarket peaked at 46% in 2019, but has gradually declined from 2021 to 2023, totaling just 17% so far this year.
The report notes that Midtown South's mostly older properties are dominated by high-tech companies that favor non-glass and non-steel buildings and features with a “non-corporate feel” such as exposed ceilings, polished concrete and exposed brick. He points out that he appealed to
Demand has driven 5.8 million square feet of new construction (including 1.4 million square feet of One Madison at SL Green) and 13.3 million square feet of renovations.
CBRE said improved supply would result in a “more equal industry mix.”
