Three billionaire magnates – Citadel’s Ken Griffin, Vornado’s Steven Roth and Rudin Management’s William Rudin – are investing their mega-dollars in the long run of the Big Apple.
The trio has formed a three way partnership that may give Citadel room for growth in the town and introduce an iconic recent office tower on Midtown Park Avenue – despite predictions that working from home will make offices obsolete.
“We think we have seen the height of working from home,” Roth said Tuesday during Vornado’s first-quarter earnings report.
“With each passing week, the office buildings look increasingly more like 2019. We consider that it is simply a matter of time before everyone seems to be back for good,” he added.
As reported within the Vornado Earnings Report, Citadel took a 10-year “master” lease on 350 Park Ave. real estate company that has 585,000 square feet.
Rent starts at $35 million a yr, or $61.50 per square foot – and can increase at an undisclosed rate over time.
The master deal means tenants currently occupying the constructing can pay rent to Citadel.
The deal doesn’t include a period of free rent, unlike many in today’s weak market.
While Griffin moved the Citadel headquarters from Chicago to Miami on account of crime within the Windy City and the standard of life crisis, the deal shows he is not done with Manhattan yet.
The Citadel also leased the adjoining 390,000 square foot Rudin 40 E. 52nd St. Terms haven’t been disclosed.
Both buildings are expected to be vacated of non-Citadel tenants inside 10 years to be demolished for a recent 1.7 million square foot super-tall skyscraper.
Vornado and Rudin also buy a small constructing round the corner, 39 E. 51st St., for $40 million to expand space for a cloudbuster where Griffin would lease not less than half the space.
The deal gives Griffin the choice to purchase out each Vornado and Rudin for a combined $1.4 billion by June 2030 and construct the tower himself.
Real estate firms may ask Griffin to purchase their stake for $1.2 billion.
Citadel already leases a big amount of space at 425 Park Ave., where it’s the major tenant, and at 350 Park.
CBRE’s tri-state CEO Mary Ann Tighe – who doesn’t represent either Citadel or the developers on the location – said their plans “strengthen New York City’s two foundations.”
“When the federal government creates a sensible, targeted, commercially viable real estate program for developers – in other words, a carrot, not a stick – positive results come quickly,” she said, referring to the brand new East Midtown zoning that permits for larger structures than previously in exchange for improvements to the general public sphere.
“[And] when employers experience the ambition, diversity, creativity and concentration of the New York workforce, they decide to thrive here. No one is moving to New York to spend more time on the beach,” Tighe added.
Meanwhile, Griffin’s plan for a $1 billion Miami skyscraper appeared to gain momentum recently as he ditched the project’s original developer and is on the lookout for one other.
