IBM has signed a lease extension to acquire more space at its flagship office at One Madison Avenue in Midtown South, Manhattan.
The expansion is for another 92,663 square feet to take its total occupancy at the property to 362,092 square feet. The deal, with Manhattan's largest landlord, SL Green Realty Corp., will be for 15 years and give the tech giant the whole 7th floor.
One Madison Avenue is 72 percent leased, which includes other major tenants such as Franklin Templeton, and Palo Alto Networks.
“The expansion of IBM’s flagship office at One Madison Avenue reaffirms a long-standing commitment to advance the technology sector in New York City and New York State, with a vibrant and collaborative workspace designed to bring employees, clients and partners together from around the world,” Joanne Wright, senior vice president for transformation and operations, said in a statement.
The move comes after SL Green struck a $1.25 billion loan modification at One Madison for the adaptive reuse project at the site in December.
The property, known for its exterior clock tower, expands across Park and Madison Avenues and East 23rd and East 24th Streets and was designed by Kohn Pedersen Fox. Some amenities in the buildings include large floor-to-ceiling windows and an HVAC system that circulates fresh air. Plus, there are several dining options including Sweetgreen, Alidoro, Joji Box, Los Tacos No. 1, Delicious Hospitality, La Tête d’Or by Daniel, and Le Jardin Sur Madison. The latter offers a rooftop setting with event space.
While the pandemic has caused some disruptions to the office market, New York continues to see one of the strongest recoveries in the country. Sarah Hawkins, CEO of East Region for Hines during ULI New York: Real Estate Outlook 2025 at NYU Stern School of Business highlighted that rents are growing in Manhattan and net absorption has been flat. Additionally, at a time when housing is needed, office space is being converted into residential assets, leading to lower availabilities. Hawkins thinks Manhattan could have as much as 17 million square feet of those assets converted, if everything successfully goes through the planning stages.