CARLYLE Group LP's US$1.3 billion deal to sell 650 Madison Ave will set a record based on the per-square-foot price for the office tower, driven by its retail space in the heart of midtown Manhattan's Plaza district.

New York-based Crown Acquisitions Inc and Highgate Holdings Inc agreed to buy the 599,550 square-feet building, Crown said at the weekend. The property between East 59th and 60th streets has 75,000 square feet of retail space in a prime tourist and office area.

The purchase is the largest of an entire building in the US since Google Inc's US$1.8-billion acquisition of 111 Eighth Ave in Manhattan in late 2010, and on a square-foot basis it exceeds the record of US$1,583 paid for 450 Park Ave in 2007. In another deal for a trophy Plaza district property, a 40 percent stake in the General Motors Building was sold to the families of Chinese real estate developer Zhang Xin and Brazil's Safra banking empire, a person familiar with the transaction said.

"The true trophy properties are in a league of their own," said Robert Stuckey, managing director and head of US real estate at Washington-based Carlyle. "There's just a quantum leap in both rents and building values when you're in that category."

The area is known as the Plaza district because of its proximity to the landmark Plaza Hotel, two blocks west of 650 Madison. It commands some of the priciest office rents in the US, and is home to notable retail stores including Bergdorf Goodman, Tiffany & Co, FAO Schwarz and Apple Inc's outlet at the bottom of the GM Building.

The GM Building stake sale, completed on May 31, valued the 50-story tower at about US$3.4 billion, according to the person with knowledge of the deal, who asked not to be named because the details are private. That works out to roughly US$1,700 a square foot for the tower, located at 767 Fifth Ave between 58th and 59th streets.

The biggest value of 650 Madison was its retail space, said Haim Chera, managing principal of Crown. The tower isn't comparable to 450 Park because of its location at the center of a "retail triangle" created by Barneys to the north, Bergdorf Goodman to the west and Bloomingdale's flagship Lexington Avenue store to the east, Chera said.