Rithm Capital eyes Paramount Group in bid that could reshape Manhattan office landscape

Rithm Capital is in talks to acquire Paramount Group in a deal that would give the buyer a substantial, 13.1 million-square-foot stake in Manhattan’s office market. Paramount’s portfolio is heavily concentrated in New York, where the company owns 11 office buildings in Manhattan and five in San Francisco, a mix that could be reshaped if a sale proceeds.

The price tag under discussion is about $1.6 billion, or roughly $6.60 per share, according to people familiar with the matter. Several major players, including SL Green and Blackstone, reportedly submitted bids after Paramount quietly announced in April that it was pursuing strategic alternatives. Rithm Capital, a large player in commercial and residential credit and asset management, would acquire a material foothold in the city’s real estate if the deal closes. Rithm CEO Michael Nierenberg, who rarely comments publicly, spoke through a spokesman, saying he was “thrilled and excited” to soon welcome Paramount’s “excellent” real estate team. He characterized the potential acquisition as a “generational opportunity” to expand Rithm’s commercial real estate and asset-management platform.

Market sources said the buyer could pursue a rationalization of Paramount’s Manhattan holdings, potentially upgrading several properties that have been described as needing attention. One source noted that the new owner would examine every asset closely, including those in San Francisco, and last year’s discussions suggested that assets might be sold as part of any strategic realization. The discussion about a sale has drawn attention from investors and analysts who are weighing whether the $1.6 billion price fairly reflects Paramount’s equity value in some towers and its overall portfolio stance. In parallel, Paramount’s executives have cautioned that any buyer would assume liabilities of the acquired entity, a factor that often figures into deal negotiations. The SEC is reportedly examining certain payments made to Paramount CEO Alfred Behler, adding another layer of scrutiny to any transaction. (Paramount and Rithm are subject to Securities and Exchange Commission disclosure rules.)

Rithm, which was founded by Fortress in 2013 and became fully self-managed in 2022, claims it has more than $100 billion in investable assets. In a statement, the firm framed the potential acquisition as a stepping stone to growing its owner-operator platform and broadening its reach in commercial real estate and asset management. Market observers described the move as a test of confidence in the strength and direction of the Manhattan office market, especially for a portfolio anchored by 11 buildings in the city rather than by a few trophy assets.

The topic of Paramount’s portfolio has been closely watched amid broader Midtown upgrading and leasing activity. Two notable Manhattan properties have attracted attention in recent months: 60 Wall Street, the 60 Wall tower that Paramount and its institutional partners are modernizing at an estimated $250 million price tag, and 60 Wall’s surrounding tenancy pressures. In the wake of new occupancy and capital-improvement discussions, brokers have said there is a steady level of leasing interest, though no leases have been publicly announced for 60 Wall yet. A brokerage source described activity as “a lot of paper being traded” in the market as tenants weigh potential relocations or expansions.

Paramount’s Manhattan holdings remain highly productive. The company said its Manhattan portfolio was 88.1% leased—the strongest level since early 2022—though the earnings release did not include 60 Wall Street’s approximately 1.6 million square feet of vacant space. Paramount’s equity stake in 60 Wall has been reported to be about 5%. By contrast, other publicly traded REITs in the sector have higher lease-coverage and higher asking rents, providing a benchmark for what a buyer would pursue as part of any consolidation or upgrade plan.

Beyond 60 Wall, Paramount’s local footprint includes properties such as 900 Third Ave. and 31 West 52nd St., where capital upgrades and ongoing occupancy dynamics have drawn both attention and speculation about future capex. In general, market participants have noted that any buyer would likely conduct a comprehensive review of the portfolio’s assets in New York as well as in San Francisco, with an eye toward optimizing rents, improving common areas, and potentially repositioning some towers for new tenants.

Illustrating ongoing market interest in individual Paramount assets, L&L Holding Company recently announced a milestone lease at 150 Fifth Ave. that demonstrates the kinds of occupier demand that may shape Paramount’s portfolio in a new ownership structure. L&L’s reconfigured building, which now houses BAM Labs, has achieved 100% office and retail occupancy, with Mastercard occupying the entire office portion—about 227,500 square feet. The property update signals how renovated or repositioned assets in Paramount’s orbit can attract major tenants. 150 Fifth Ave. sits near several other marquee Midtown addresses and reflects the broader trend of high-profile upgrades across the district. In related activity, 1515 Broadway remains tied to a gaming-related site, while Minskoff Theatre in the same complex continues to draw crowds for “The Lion King.” The tower also benefits from a recent extension of its mortgage, a $742 million loan extended to 2028, underscoring ongoing financing support for key Midtown properties.

Meanwhile, Paramount’s broader portfolio has attracted attention from tenants considering relocation to its flagship towers. The looming question for investors is how a new owner would manage the mix of occupancy, capital needs, and potential asset sales across the Manhattan portfolio, while balancing San Francisco properties that have shown signs of rebound but historically lag the NYC market. The outcome of ongoing discussions and any ensuing transaction would hinge on the terms of the sale, the assumed liabilities, and the buyer’s willingness to invest in capital improvements across several properties.

If a deal with Rithm proceeds, analysts expect a thorough review of Paramount’s assets, with a focus on determining which towers merit upgrades and which might be repositioned or sold. The deal would also have implications for tenants, landlords, and lenders connected to Paramount’s properties, as well as for the broader perception of Manhattan’s office market at a time when demand for premium space remains a key variable in pricing and leasing activity. The timeline and final terms remain uncertain, and any transaction would be subject to regulatory review and shareholder approvals. In the meantime, market participants will be watching how Paramount’s portfolio performances evolve and whether a new owner would pursue a blend of capital-intensive upgrades and selective dispositions to unlock value across its Manhattan footprint.