Manhattan's former Sony Building lands Chubb as anchor tenant

THE insurance firm Chubb has signed as anchor tenant at Manhattan's 550 Madison Avenue, the former Sony Building.

The company is leasing 240,000 square feet across 10 floors of the tower, landlord Olayan Group said on Thursday (Nov18).

The deal, which spans beyond a decade, represents more than 30 per cent of the 41-storey property's offices.

Chubb plans to relocate its New York headquarters from its current offices near Times Square when the new space is ready in 2022.

Olayan has spent US$300 million gut-renovating the tower and installing hospital-level filtration systems, motion sensors and a library curated by luxury publisher Assouline.

The building also will have a garden with roughly 50 full-grown trees and hundreds of plants.

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Manhattan's office market has been battered by the pandemic, with supply far outweighing demand as companies re-evaluate their space needs in the age of hybrid work.

While leasing has ticked up over the past few months, deals are still below pre-pandemic averages.

Newly built or renovated properties - including SL Green Realty's One Vanderbilt, and 122 Fifth Avenue, where Microsoft Corp recently agreed to take space - have had an advantage over dated ones.

"The activity we're having is disproportionate to the market because of the product it is," said Erik Horvat, managing director of real estate at Olayan America.

"I don't think there's a ton of product available that's a building like this. One Vanderbilt is leased, Hudson Yards is leased."

A partnership led by Olayan Group, a Saudi Arabian investment firm, purchased the tower in 2016 for more than US$1.4 billion. Since opening in 1984, the building has housed just two companies, AT&T and Sony Group. BLOOMBERG