Four New York skyscrapers refinance $3bn via CMBS as return‑to‑office builds momentum; NY-only office securitizations hit $11bn in 2025, the most since 2021.

Investors are piling back into New York City’s commercial real estate. In recent weeks, owners of four Manhattan skyscrapers have tapped the commercial mortgage‑backed securities (CMBS) market to refinance a combined $3 billion of debt — a sharp turn from the deep freeze that followed the pandemic and the Federal Reserve’s aggressive tightening cycle. The latest deals, reviewed by the Financial Times and backed by data from Bank of America, suggest that big money managers see the return‑to‑office wave as a much‑needed salve for a market that has spent three years on the defensive.

The surge has lifted borrowing tied exclusively to New York office towers in the CMBS market to roughly $11 billion so far this year, putting overall office financing in U.S. securitized markets on track for its strongest year since 2021 — the last full year before the Fed began raising rates. It’s still a selective rally, but it is a rally nonetheless.

The momentum is visible across some of Midtown’s most recognizable addresses. Paramount Group closed a $900 million refinancing at 1301 Avenue of the Americas; Blackstone and Fisher Brothers secured about $850 million for 1345 Avenue of the Americas as part of a stake sale; Vornado Realty Trust completed a $450 million refinancing for PENN 11 near Penn Station; and the Durst Organization lined up roughly $1.3 billion for its Times Square tower One Five One, whose tenants include fast‑growing tech and finance names. Each of those deals was packaged for the CMBS market, drawing orders from insurance companies, bond funds and structured‑credit specialists seeking higher yields now that price discovery has improved.

Why now? Part of the answer is policy. Signs that the Fed is preparing to pivot from restrictive to slightly easier policy have lowered benchmark borrowing costs and—crucially—reduced uncertainty. Chair Jerome Powell’s late‑August remarks at Jackson Hole opened the door to a rate cut as early as September, reinforcing a months‑long drift lower in the effective fed funds rate and Treasury yields. With the cost of debt stabilizing, lenders can underwrite income streams with more confidence, and borrowers can justify terming out near‑maturity loans.

Part of the answer is demand. Office attendance and leasing in New York continue to grind higher. City data show Kastle’s key‑card metric reached a post‑pandemic high in early August at 54.7% of pre‑COVID levels, while the Real Estate Board of New York’s broader ‘office visitation’ gauge hit 72% in May and 85% for top‑tier Class A+ buildings. Private brokerages report a visible tightening too: CBRE says Midtown availability fell to 15.5% in the second quarter, down 270 basis points year‑over‑year, with positive net absorption and steady asking rents. That is still far from 2019’s ‘full‑tilt’ market, but it is a marked improvement from 2023.

Crucially, the latest transactions show that lenders will finance more than just brand‑new ‘trophy’ towers. Several of the refinanced properties date to the 1960s and 1970s, but they have been upgraded and—importantly—are well leased to long‑duration tenants. That is the new dividing line in New York’s office market: strong tenancy plus credible capital‑expenditure plans can reopen the securitized‑credit spigot; thin rent rolls and deferred maintenance still struggle to clear the bar.

Even so, this is not a return to the go‑go credit of the late 2010s. Structures are tighter and lenders are demanding more borrower skin in the game. At PENN 11, for example, Vornado contributed additional equity alongside a five‑year, fixed‑rate, interest‑only CMBS loan. Across recent deals, loan‑to‑value ratios are lower, extension options are more conditional and replacement‑reserve accounts are fatter than they were three years ago.

The credit backdrop also argues for caution. CMBS delinquencies have risen through the summer, climbing to above 7% in July by Trepp’s count, with office loans representing the largest share of newly delinquent balances. That stress is concentrated in commodity B/C assets and in markets where return‑to‑office has lagged, but it remains a headwind for any broad‑based recovery in valuations.

What distinguishes New York in 2025 is the breadth of the demand rebound. Midtown and the Plaza District have benefited from a self‑reinforcing loop: blue‑chip occupiers are consolidating footprints into higher‑quality space, which supports amenity investment by landlords, which in turn pulls even more workers back on peak days. Security‑badge data routinely show Tuesday and Wednesday attendance approaching—sometimes exceeding—90% of pre‑pandemic baselines in the top tier of buildings. Retail footfall in core office corridors has risen in tandem, softening the blow from tourism’s slower patch this summer.

For bond buyers, the calculus is straightforward: income visibility plus optionality. Refi deals at Sixth Avenue, Times Square and the Penn District carry long weighted‑average lease terms and a tenant roster anchored by law firms, banks and investment managers. With benchmark yields easing, senior CMBS bonds backed by such towers can deliver mid‑single‑digit excess spread over Treasuries—enough to tempt capital back into a sector that many portfolios underweighted after 2022.

For developers and owners, the window may be narrow. More than $1 trillion of commercial mortgages is scheduled to mature nationally between now and 2027, including billions tied to New York offices. If the Fed follows through with modest cuts this autumn and again in December—as futures markets now imply—issuers could bring a larger slate of single‑asset/single‑borrower CMBS to market before year‑end. But any negative surprise on inflation or jobs could re‑price risk quickly, especially for assets that still face heavy lease roll in 2026‑27.

The other wild card is policy at City Hall and in Albany. Proposals to streamline office‑to‑residential conversions, expand tax incentives for deep retrofits and modernize zoning in key districts could accelerate the culling of obsolete stock while channeling private capital into greener, higher‑performing buildings. Such measures would complement the market‑driven sorting already under way: more capital to better buildings, conversions or workouts for the rest.

Bottom line: New York’s office market is not ‘back’ in the pre‑pandemic sense. But the combination of a steadier rate backdrop, measurable progress on return‑to‑office and improving leasing in core submarkets has pulled real money off the sidelines. Four headline refinancings worth $3 billion are the latest proof point—and they have pushed New York’s CMBS office volumes to $11 billion for the year, a post‑2021 high. If that pace continues into the fall, expect more skyscrapers to test the market and more investors to follow the crowd back to Midtown.

Sources

[1] Financial Times – “Investors pile billions into New York office market,” August 2025. Bank of America data cited on $3bn of recent CMBS refinancings and $11bn YTD tied to New York offices.

[2] Financial Times – FirstFT newsletter, August 24–25, 2025, highlighting New York CMBS office lending at its highest since 2021.

[3] NYCEDC – New York City Economic Snapshot (August 2025): Kastle RTO at 54.7% of pre‑COVID; REBNY office visitation at 72% overall and 85% for Class A+ (May).

[4] CBRE – Midtown Office Figures Q2 2025: availability down to 15.5% year‑over‑year; positive net absorption.

[5] Deal updates: Paramount Group $900m refi at 1301 Avenue of the Americas (Business Wire/Aug 6, 2025; GlobeSt/Aug 7, 2025); Blackstone/Fisher Brothers $850m CMBS at 1345 Avenue of the Americas (Commercial Observer/May 27, 2025; Business Wire/Jun 9, 2025); Vornado $450m refi of PENN 11 (company release/Jul 16, 2025); Durst $1.3bn CMBS at One Five One, Times Square (CoStar/Aug 4, 2025; GlobeSt/Aug 5, 2025).

[6] Trepp via MBA Newslink – CMBS delinquency rate rose to ~7.23% in July 2025, with office leading new delinquencies.

[7] Federal Reserve/Jackson Hole coverage (Reuters/AP/FT): Powell indicated conditions may warrant a rate cut as early as September 2025; market odds pricing further easing into year‑end.