Rithm Capital Closes Joint Venture on Fully Leased Midtown Tower

The deal values 1301 Avenue of the Americas at $1.3 billion and comes as Manhattan office vacancy fell to 12.6%, the lowest since before 2020.

By the Family Office Real Estate Daily Desk·Monday, November 2, 2026·2 min read

Editorial summary of reporting byfinance.yahoo.com Our editorial standards →

The answer · checked against finance.yahoo.com

What are the terms and ownership structure of Rithm Capital's joint venture at 1301 Avenue of the Americas?

Rithm Capital closed a joint venture with a DRA Advisors fund at 1301 Avenue of the Americas, retaining 51% majority ownership through its Elecor Properties platform at a $1.3 billion valuation. The 1.7 million square foot, 45-story Midtown tower is fully leased to tenants including KeyBank and Crédit Agricole. Manhattan office vacancy fell to 12.6%, the lowest since before 2020, according to JLL data cited by IREI.

Key facts

Rithm Capital closed a joint venture with a DRA Advisors fund at 1301 Avenue of the Americas, with DRA taking a 49% stake at a $1.3 billion valuation, according to Commercial Observer as cited by CRE Daily.
Rithm Capital retains 51% majority ownership of 1301 Avenue of the Americas and continues to operate the tower through its Elecor Properties platform, according to IREI.
The 1301 Avenue of the Americas tower is a fully leased, 45-story, 1.7 million square foot building with tenants including KeyBank, Piper Sandler, Crédit Agricole and O'Melveny & Myers.
JLL data cited by IREI shows Manhattan office vacancy dropped to 12.6% from 14.7% a year earlier through the third quarter, with net absorption approaching 4.9 million square feet.
Manhattan direct asking rents rose to $84.56 per square foot, and CRE Daily flagged 12.6% vacancy as the lowest since before 2020, with limited new supply as the main constraint.
Rithm vice president Jonny Nierenberg told IREI that tighter availability is shifting leverage to landlords, allowing owners to raise rents and lift NOI while existing tenants are opening renewal talks earlier in strong class A submarkets.

Rithm Capital Closes Joint Venture on Fully Leased Midtown Tower — Image: editorial illustration · Story sourced from finance.yahoo.com

Rithm Capital closed a joint venture with a DRA Advisors fund at 1301 Avenue of the Americas, keeping majority ownership and continuing to operate the fully leased, 45-story Midtown tower. Rithm holds a 51% stake through its Elecor Properties platform, while DRA took a 49% interest at a $1.3 billion valuation, Commercial Observer reported. Financial terms were not disclosed.

The 1.7 million-square-foot building is fully leased. Tenants include KeyBank, Piper Sandler, Crédit Agricole and O'Melveny & Myers. The tower also houses The Aurelian, a renovated 32,000-square-foot private club.

Manhattan leasing reached 25.7 million square feet through the third quarter, up 2.3% from a year earlier, JLL data showed. Vacancy dropped to 12.6% from 14.7%, and net absorption approached 4.9 million square feet. Direct asking rents rose to $84.56 per square foot.

The recovery is uneven across submarkets. Vacancy sits at 7% in Hudson Yards, 7.3% at the World Trade Center and 9.7% in the Midtown Core. Midtown East, by contrast, posted 16.9% vacancy.

Buyers favor credit tenants, long weighted average lease terms, strong amenities and prime locations, Jonny Nierenberg, a Rithm vice president, told Institutional Real Estate, Inc. In his view, 1301 has all four.

Nierenberg described two camps of buyers. One prizes yield on cost, seeking strong net operating income and modest capital needs that produce steady cash-on-cash returns. The other plays the rent-growth story, buying space with in-place rents below market and pushing them at expiration, he said.

Tighter availability is shifting leverage to landlords, Nierenberg said. Competition for space lets owners like Elecor raise rents and lift net operating income, while existing tenants are opening renewal talks earlier in strong Class A submarkets. Activity across recapitalizations, refinancings and sales has picked up, with demand across the capital stack, he said. Closing in a higher-rate environment signals that investors want to work with strong operators, he told the publication. Rithm plans similar capital partnerships across Elecor, which it acquired in December 2025 along with Class A offices in New York and San Francisco. The company has put money into capital improvements across the portfolio since then.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

This transaction shows two deployment paths. Co-GP capital alongside Rithm offers exposure to a stabilized, credit-tenant tower with rent-reset upside as leases roll in a tightening market. The 49% DRA stake at a $1.3 billion valuation implies roughly $637 million of equity from DRA if the building carries minimal debt, though the source does not state leverage. A family office writing a $50 million to $100 million cheque could replicate this structure with other core-plus landlords holding occupied Midtown assets.

Direct ownership via a programmatic joint venture with an operator like Elecor is the alternative. Rithm acquired Elecor in December 2025 and is raising capital across the portfolio, which includes New York and San Francisco offices. A separate account committed to Class A properties in submarkets below 10% vacancy would avoid Midtown East's 16.9% overhang and capture the rent leverage Nierenberg described.

Underwrite tenant rollover carefully. The source confirms the building is fully leased but does not specify lease expiration schedules. If a material portion of the 1.7 million square feet rolls in the next three years, mark-to-market opportunity is large: in-place rents locked in before the recent recovery will reset closer to the $84.56 per square foot asking rate. Price in capital expenditure for tenant improvements and leasing commissions on those rollovers, especially if tenants demand upgraded amenities to justify higher rents.

Avoid yield-on-cost plays in Midtown East and other submarkets still above 15% vacancy. Those buildings face downward rent pressure and extended lease-up risk. Focus instead on Hudson Yards, the World Trade Center and the Midtown Core, where sub-10% vacancy gives landlords pricing power. The uneven recovery means location selection, not just credit tenancy, drives returns in this cycle.

Questions this story answers

01What is the valuation and ownership structure of the 1301 Avenue of the Americas joint venture?

CRE Daily reported on October 5, citing Commercial Observer, that DRA Advisors is taking a 49% stake in 1301 Avenue of the Americas at a $1.3 billion valuation. Rithm Capital holds the 51% majority and continues to operate the tower through its Elecor Properties platform. IREI noted that specific financial terms were not disclosed.

02Who are the major tenants at 1301 Avenue of the Americas?

The 1.7 million square foot tower is fully leased. Tenants include KeyBank, Piper Sandler, Crédit Agricole and O'Melveny & Myers. The building also houses The Aurelian, a renovated 32,000 square foot private club, according to IREI.

03What is the current Manhattan office vacancy rate and how does it compare to last year?

JLL data cited by IREI shows Manhattan office vacancy fell to 12.6% through the third quarter of 2026, down from 14.7% a year earlier. CRE Daily identified 12.6% as the lowest vacancy rate since before 2020, with limited new supply cited as the main constraint.

04Which Manhattan office submarkets have the lowest vacancy rates right now?

According to IREI, vacancy in Manhattan varies significantly by submarket. Hudson Yards sits at 7%, the World Trade Center area at 7.3%, and the Midtown Core at 9.7%. Midtown East remains the weakest submarket at 16.9% vacancy.

05What are Rithm Capital's plans for its Elecor portfolio after this deal?

Rithm Capital plans similar capital partnerships across its Elecor Properties portfolio, which it acquired in December 2025 along with class A offices in New York and San Francisco, according to IREI. Rithm vice president Jonny Nierenberg told IREI that activity across recapitalizations, refinancings and sales has picked up, with demand across the capital stack.

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Original reporting

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