Saudi Fund & Related Companies Partner for Manhattan Office Tower

Saudi Arabia’s sovereign investment vehicle has joined forces with Related Companies to secure a two‑thirds ownership interest in the plot at 625 Madison Avenue. Sources indicate that the cumulative expenditure, including land acquisition and construction, will surpass $1 billion. To date, the fund has committed $200 million toward the venture, with its ultimate equity share still being finalized.

Evolution of Development Vision

Originally conceived as a mixed‑use complex combining residential apartments, retail outlets, and a hospitality component, the scheme has recently been reimagined. Related Companies now plans to erect an approximately 840,000‑square‑foot office tower, aiming to tap into the surging demand for top‑tier corporate space in Midtown Manhattan.

Site Acquisition and Historic Demolition

Last year, the joint venture acquired the site, located just a stone’s throw from Central Park—for north of $600 million. The partners promptly set about razing the existing structure, famed for having served as Nabisco’s headquarters and, in earlier decades, Related’s own offices.

Neighbourhood’s Development Hotspot

The immediate five‑block radius around 625 Madison Avenue has emerged as a magnet for large‑scale projects. Nearby, Extell Development is advancing plans for a luxury supertall at 655 Madison Avenue, while Ashkenazy Acquisition Corp. is marketing the former Barneys flagship at 660 Madison for a potential nine‑figure sale. Just down the street, RXR is poised to buy 590 Madison Avenue for $1.1 billion.

PIF’s Expanding Global Footprint

Managing nearly $1 trillion in assets, Saudi Arabia’s Public Investment Fund ranks among the world’s most formidable institutional backers and marks a robust re‑entry into New York’s real estate arena. Its close ties with Related Companies trace back to a 2020 convertible debt infusion, which could translate into a 15% equity position. Since then, the two entities have collaborated on multiple high‑profile developments, including this latest Midtown project.

Shift from Domestic Megaprojects to International Stakes

While PIF historically concentrated its real estate capital on transformative domestic ventures, recent years have seen a deliberate pivot overseas. The fund has acquired significant stakes in renowned global assets, most notably a 40% investment in the U.K.’s distinguished Selfridges department store chain and a 49% holding in the luxury hotel operator Rocco Forte.