NYC Tower Owners Drop Conversion Plans

January 26, 2026

Office Development Finance New York More News Northeast

The building will maintain its current use, reflecting the strength of Manhattan’s office market.

The 745 Fifth Ave. office tower in Manhattan. *Image courtesy of Rithm Capital and Paramount Group*

The co-owners of the 745 Fifth Ave. tower in Manhattan have ditched plans to convert the building from office space into apartments, Crain’s New York Business first reported.

With owners Rithm Capital and the von Finck family apparently both deterred by the high cost of residential conversions and encouraged by the resilient demand for Manhattan office space, the 34-story, 565,000-square-foot tower will remain an office building.

Crain’s cited a Fitch Ratings report as the source of the news, which reportedly dates back to sometime in 2024. The current plan is that the co-owners will put nearly $40 million into a $275 million refinancing package, along with $25 million to cover leasing costs, capital expenditures and other expenses, according to Fitch.

The 1930-vintage, LEED Gold building’s office space is 37 percent vacant, while its retail portion is fully occupied by a Bergdorf Goodman men’s store.

The tower’s owner for a couple of decades had been Paramount Group, which bought the building in 2002 for $268.5 million, according to Yardi Matrix data. Rithm acquired the building—and much else—when it acquired Paramount in a $1.6 billion deal late last year.

“Our confidence in 745 Fifth Avenue as an office asset reflects our belief in the long-term fundamentals of premier office markets like New York City. Our acquisition of Paramount is aligned with this view, underscoring our conviction in best-in-class, well-located office properties,” a spokesperson for Rithm told Commercial Property Executive. “We continue to see strong demand for high-quality space and believe this asset is well-positioned within the city’s office market.”

Conversions, to and from

As CPE reported in June, a CBRE analysis found that more U.S. office space will be removed from the market through demolition or conversion (mostly into multifamily) than will come onto the market as of year-end 2025. The losses total 23 million square feet across 58 markets, versus just 12.7 million square feet of new office deliveries in 2025.

Vis-à-vis the change of plans for 745 Fifth Ave., the CBRE report noted that the pace of conversions varies considerably by market.

To complicate things further, retail-to-office conversions appear to be a growing niche. The woes of underperforming Class B and C shopping malls are enticing some developers, architects and investors to try converting troubled retail spaces into creative, flexible office environments.