Stay informed with free updates
Simply sign up to the Property sector myFT Digest — delivered directly to your inbox.
A skyscraper in midtown New York has smashed rent records by leasing its top two floors to a low-profile hedge fund for up to $21.2mn a year.
Castle Hook Partners will move into the penthouse of 625 Madison Avenue, an office tower owned by real estate developer Related Companies, in the second half of 2029.
The fund’s willingness to pay between $350 and $400 per square foot in yearly rent for 53,000 square feet of space, according to people familiar with the matter, signals the boom at the high end of Manhattan’s office market is accelerating.
The previous reported record for office rent was set earlier this year when a private international family office signed a 10-year lease averaging $327.50 per square foot in a Midtown tower owned by the Soloviev Group.
While Related had originally planned to build a luxury residential high-rise on the site, purchased from SL Green in early 2024, it decided instead to tap into the “real premium” that exists for “new, properly amenitised, high-end office with incredible views”, Related chief executive Jeff Blau said in an interview.
A war for talent in the financial services and technology sectors, combined with a drive to attract workers back to the office, has resulted in a golden era for the city’s luxury offices.
The 53-storey high-rise overlooking Central Park has been designed by British architect Lord Norman Foster and will feature private dining facilities and wraparound terraces on its penthouse and “amenity floor”, said Blau.
Castle Hook, founded by Soros Fund Management alumnus David Rogers in 2016, is currently headquartered in the General Motors Building on Fifth Avenue. The firm counted legendary hedge fund manager Stanley Druckenmiller among its early investors and has kept a low profile on Wall Street. It manages about $11bn with 35 employees, according to its most recent regulatory filing.
The firm is among so-called global macro hedge funds — which trade macroeconomic trends in currencies, commodities, bonds and stocks — that have benefited from a volatile few years in markets. Macro funds were up 6.8 per cent for the year through the end of August, according to research firm PivotalPath.
Castle Hook has posted high returns in recent years. The firm reportedly gained about 50 per cent last year and made more than 60 per cent the year prior.
A spokesperson for Castle Hook did not respond to a request for comment.
The battle for talent among hedge funds has become fierce, with lavish offices and amenities emerging as ways to compete for top portfolio managers beyond huge cheques. Hedge funds and other financial firms were among the first companies to require employees to return to their desks after the pandemic.
Prominent hedge fund managers such as Bill Ackman and Dan Loeb have been among the loudest voices decrying New York mayor Zohran Mamdani’s populist policies and their potential impact on the city’s real estate market. After Mamdani won the Democratic primary, some Wall Street executives privately warned his ascent would drive financial firms out of the city.
“People might have their views on where New York politics are, but I think people believe in the future of New York City,” said Related’s Blau.
Related’s building on Madison Avenue would be 67 per cent leased by the end of the year, mostly to financial services companies, said Stephen Winter, the company’s executive vice-president. Private equity firm General Atlantic will take five floors as the anchor tenant.
JPMorgan Chase’s headquarters, unveiled in 2025, features a state of the art health and wellness centre and 19 dining options, and has set the tone for new office amenities around the city.
The value of Castle Hook’s lease has not been previously reported. The 15-year tenancy agreement was reported earlier by the New York Business Journal.
