SL Green has entered into a contract to acquire Park Avenue Tower in what would be one of the biggest office deals of the year.

The firm agreed to pay Blackstone $730M for the 622K SF tower at 65 E. 55th St. The transaction is expected to close in the first quarter, SL Green announced Wednesday.

SL Green Chief Investment Officer Harrison Sitomer said in a statement that the purchase further solidifies the REIT’s “commitment to being the leading owner of premier properties along Park Avenue at a time when demand has never been higher.”

He added that the property is “well-leased at below-market rents” at a time of low vacancy on Park Avenue. The tower was 87% occupied with average rents of $112 per SF in January 2024, Crain's New York Business reported last year.

The corridor’s vacancy rate was 11% as of the third quarter, according to a Cushman & Wakefield report. Class-A vacancy is even lower.

Despite recovery in the office sector, Blackstone is still taking a slight haircut on the deal. It paid $750M when it bought the 36-story Park Avenue Tower from Shorenstein Properties in 2014, according to property records.

Blackstone then spent $170M to renovate the property following the departure of two major tenants in 2016, according to The Real Deal, which first reported the sale. Improvements were made to the plaza and lobby, and the building has been equipped with prebuilt office suites and new amenities, SL Green said.

After inking a handful of new leases, Blackstone put the building on the market in 2019, asking for $800M, but it never sold, according to TRD. Last year, the asset management giant refinanced its 2019 debt with a $308.5M loan from Morgan Stanley.

Eastdil Secured’s Gary Phillips and Will Silverman represented Blackstone in the transaction.

The deal comes on the heels of several other large office sales. In August, RXR closed on its purchase of 590 Madison Ave., a 42-story, 1M SF tower, for nearly $1.1B. Norges Bank Investment Management and Beacon Capital Partners spent nearly $573M on 1177 Sixth Ave., which also spans 1M SF, according to a deed filed this month.

The purchase of Park Avenue Tower adds to SL Green’s portfolio of seven other properties on the corridor, including One Vanderbilt.

SL Green also announced Wednesday that it sold another 5% interest in the 1.7M SF skyscraper to Mori Building Co., adding to the 11% interest the Japanese developer acquired last November.

Both deals value the property at $4.7B, making it one of the most valuable buildings in the country. SL Green maintains a 55% stake in the tower, which directly connects to Grand Central Terminal.