Trophy Offices Strike Back on Billionaires’ Row

By Howard Morrel & Leslie Hirsch

57th Street Report

Why 745 Fifth Avenue Abandoned Residential Conversion Plans

A notable shift is underway on Billionaires’ Row, as the owners of 745 Fifth Avenue, the landmark Bergdorf Goodman building at 58th Street, officially abandon plans for a residential conversion and recommit to office use. The move underscores a broader resurgence in demand for trophy office buildings in Manhattan’s most prestigious corridors.

Owners Rithm Capital and the von Finck family quietly scrapped plans to convert the prewar Plaza District tower into apartments last year, according to a recent Fitch Ratings report cited by Crain’s New York. Instead, the partnership is moving forward with a $275 million refinancing, including nearly $40 million in new equity and an additional $25 million allocated for leasing, capital improvements, and repositioning costs.

The approximately 470,000-square-foot Fifth Avenue property, located at the gateway to 57th Street and Billionaires’ Row, was about 37 percent vacant as of October, leaving roughly 200,000 square feet of prime office space available. The building’s retail base is fully occupied by Bergdorf Goodman Men’s, one of New York’s most iconic luxury retail anchors, while the upper floors enjoy sweeping Central Park views, a rarity even among Midtown office buildings.

Ownership of 745 Fifth Avenue changed hands last month when Rithm Capital acquired Paramount Group’s interest in the asset. Paramount had purchased the building in 2002 for $263 million and had previously explored a residential conversion, part of a wider Midtown trend aimed at repurposing obsolete office inventory.

But on Billionaires’ Row, conversion economics remain challenging. The New York City Comptroller’s Office has estimated office-to-residential conversion costs at approximately $663 per square foot, citing 750 Third Avenue as a case study. Applied to 745 Fifth Avenue, such costs would likely exceed $300 million, before factoring in carrying costs, regulatory complexity, and execution risk.

Instead, ownership is betting on what continues to differentiate elite office assets: a Fifth Avenue address, proximity to the Plaza Hotel, adjacency to LVMH’s new headquarters, landmark architecture, and unobstructed park views, all elements that appeal to tenants seeking best-in-class office space in Manhattan’s most prestigious locations.

In a statement, Rithm Capital cited “strong demand for high-quality space” and expressed confidence in the long-term fundamentals of New York City’s premier office corridors.

Market data supports that optimism. According to Colliers, Manhattan office leasing totaled 42 million square feet in 2025, marking the strongest year since before the pandemic and representing a 25 percent increase over 2024. While many older, commodity office buildings continue to struggle, trophy assets on Fifth Avenue and along Billionaires’ Row are outperforming.

For owners, investors, and tenants alike, 745 Fifth Avenue’s pivot is a clear signal: on 57th Street and Billionaires’ Row, location, quality, and views still matter and in the right buildings, the office market is very much back.