On May 8, Kelly Stevens, chief operating officer of Simpson Thacher & Bartlett, signed a lease for 916,000 square feet at Extell Development's 570 Fifth Avenue. The memorandum of lease, filed in property records, confirms the largest Manhattan office deal signed in May.
Simpson Thacher, a global law firm specializing in corporate transactions and private equity, originally negotiated for roughly 700,000 square feet in September 2025. The final lease is more than 200,000 square feet larger. The terms of the expansion were not disclosed.
The law firm will occupy 26 of the 29 stories in the tower, making it the property's anchor tenant. The lease includes two 10-year renewal options. The building, anchored by a Scandinavian furniture retailer, is under construction with an expected delivery date of 2028.
CBRE represented Simpson Thacher. Extell's Gary Barnett signed for the developer. The asking rent was not disclosed, but the average asking rent for Midtown Manhattan office space was $84.15 per square foot in May, per Colliers data.
The lease represents a significant commitment to new-build office space at a time when Manhattan's office market is bifurcating. Class A+ properties with modern amenities and efficient floor plates are attracting tenants willing to pay a premium, while older buildings face persistent vacancy and repricing pressure.
Simpson Thacher's current address is 425 Lexington Avenue. The firm has not announced a move date, but the 2028 delivery of 570 Fifth Avenue suggests a multi-year transition timeline. The lease locks in a long-term footprint in a market where institutional tenants are increasingly prioritizing quality over cost.
The expansion from 700,000 to 916,000 square feet signals either a reassessment of space needs or a strategic decision to consolidate operations. Law firms have been among the most active tenants in Manhattan's office market, often seeking larger, more efficient spaces to support hybrid work models and client service demands.
Extell's 570 Fifth Avenue is part of a broader wave of new office development in Midtown, including projects by SL Green, Vornado, and Related Companies. These developments are competing for a limited pool of creditworthy tenants willing to commit to long-term leases in a high-interest-rate environment.
The lease economics matter for capital markets. At $84.15 per square foot, Simpson Thacher's annual rent would be approximately $77 million. That cash flow supports the capitalization of a development that likely carries significant construction debt and requires a stabilized occupancy to refinance or sell.
For lenders underwriting office construction loans, anchor tenants with investment-grade credit profiles reduce lease-up risk. Simpson Thacher's commitment provides a revenue floor that improves the project's debt service coverage ratio and lowers the probability of default during the lease-up period.
The deal also reflects a broader shift in tenant behavior. Companies are not abandoning offices; they are consolidating into higher-quality spaces. The flight to quality is real, and it is concentrated in a narrow band of trophy assets. Simpson Thacher's lease is evidence that institutional tenants are willing to pay a premium for new-build product.
The question for investors is whether the supply of new office space will outpace demand. Extell's 570 Fifth Avenue is one of several large developments scheduled for delivery in the late 2020s. If tenant demand softens, the lease-up period could extend, pressuring returns for developers and lenders.
Simpson Thacher's lease is a vote of confidence in Midtown's future as a corporate hub. But it is also a reminder that the office market is not recovering uniformly. The gap between trophy assets and the rest is widening, and capital flows will follow the quality gradient.