Citadel Eyes New 1.7M SF Manhattan Tower In Deal With Vornado, Rudin
Hedge fund billionaire Ken Griffin is looking to make an even bigger mark on Park Avenue.
The founder of Citadel and Citadel Securities is negotiating to acquire three adjacent office properties in Midtown Manhattan with the hopes of developing a huge new office tower to house his companies' New York operations, Bloomberg reports.
Griffin is working to acquire 350 Park Ave., where Citadel already leases space, 40 East 52nd St. and 39 East 51st St. in a deal with New York real estate heavyweights Vornado Realty Trust and Rudin Management Co. Citadel can either buy the site for $1.4B and build the property itself or take a 60% interest in a joint venture with the landlords that would value it at $1.2B, Bloomberg reported.
“We reached the decision to pursue this transaction after thorough consideration of other alternatives in New York City,” Zia Ahmed, a spokesperson for Citadel, told Bloomberg in an email. “We expect that if this building is built it will be able to house all of our New York City employees for both Citadel and Citadel Securities, which will reduce the need for us to have them spread across multiple sites in New York City as they currently are.”
Citadel is already a tenant at 350 Park Ave. and, as part of the deal, has agreed to occupy all of that building, which is owned by Vornado, and Rudin’s 40 East 52nd St.
When the demolition phase of the new development begins, the leases will end, and if the joint venture route is taken, Citadel or its affiliates will ink a 15-year anchor lease of 850K SF at the new property, per Bloomberg.
Citadel also leased roughly 200K SF at L&L Holding Co.'s 425 Park Ave. in 2016, a deal that reportedly had it paying more than $300 per SF for the top floors. The firm moved in this year and has signed on for even more space in the building, per the New York Post.
Ahmed told Bloomberg the building doesn't have enough room to accommodate Citadel's growing workforce, which totals 1,500 in the city. The news will come as something of a relief for champions of New York City and its office market.
This summer, Griffin said he was moving the company headquarters from Chicago, where it was founded, to Miami — another deal that would see Citadel act as developer of its own headquarters, in partnership with Sterling Bay.