Three billionaire moguls — Citadel’s Ken Griffin, Vornado’s Steven Roth and Rudin Management’s William Rudin — are putting their megabucks into the Big Apple’s future.
The three formed a joint-venture partnership that would give Citadel room to grow downtown and bring an iconic new office skyscraper to Midtown Park Avenue — despite forecasts that working from home would make offices obsolete.
“We think we’ve seen the peak in work from home,” Roth said Tuesday during Vornado’s first-quarter earnings report.
He added, “With each passing week, office buildings feel more like 2019. And we believe it is only a matter of time before all is back for good.”
As noted in Vornado’s earnings report, Citadel took a 10-year “master” lease. Real Estate Co. 350 Park Ave.comprising 585,000 sq. ft.
Rent starts at $35 million per year, or $61.50 per square foot – and will increase at an undisclosed rate over time.
The master lease means that the tenants currently living in the building will pay rent to Citadel.
Unlike many in today’s weak market there is no free-rent period included in the deal.
while the griffin’s gone Citadel’s headquarters move from Chicago to Miami Due to the Windy City’s crime and quality of life woes, the deal shows he isn’t finished with Manhattan by a long shot.
The terms of the Citadel also at Rudin’s adjacent 390,000-square-foot 40 E. 52nd St. were not disclosed.
Both buildings are expected to be vacated by tenants other than the Citadel within 10 years, so they could be torn down for a new, supertall, 1.7 million square foot skyscraper.
Vornado and Rudin are also buying the smaller building next door, 39 E. 51st St., for $40 million to increase the Cloud-Buster’s footprint, where Griffin will lease at least half the space.
The arrangement gives Griffin the option to buy both Vornado and Rudin and develop the towers itself through June 2030 for a total of $1.4 billion.
Real estate companies may also require Griffin to buy out his stake for $1.2 billion.
Citadel already leases a significant amount of space at 425 Park Avenue, where it is the anchor tenant, as well as at 350 Park.
CBRE Tristate CEO Mary Ann Tighe — who does not represent either the Citadel or the developers on the site — said her plans “reinforce two fundamental principles of New York City.”
“When the government creates an intelligent, targeted, commercially viable, ‘as-is’ real estate program for developers – in other words, a carrot and not a stick – positive results happen fast,” he said of the new East Midtown. referring to said zoning which allows for larger structures than in the past in exchange for improvements in the public realm.
,[And] When employers experience the ambition, diversity, creativity and focus of New York City’s workforce, they choose to grow here. Nobody moves to New York to spend more time at the beach,” Tigh said.
Meanwhile, Griffin’s plans for a $1 billion skyscraper in Miami seemed to have hit a speed bump recently when he dumped the project’s original developer and is looking for another.