NEW YORK | 350 Park Avenue | 1,600 FT | 62 FLOORS

[NYguy]

AUGUST 11, 2023


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[NYguy]

Maybe not leasing space at 280 Park…


https://nypost.com/2023/09/10/citade...-hiring-spree/

Citadel presses pause on Manhattan expansion despite hiring spree


By Steve Cuozzo
Sep. 10, 2023

Citadel’s quest for 400,000 square feet of additional Manhattan space at 280 Park Avenue has hit the “pause” button.

Crain’s reported in June that Ken Griffin’s monster hedge fund was in negotiations with landlords SL Green and Vornado for the expansion space. The 1.27 million square-foot tower is almost fully leased, but several large leases are due to expire at the end of year.

Now, however, sources say that the Citadel talks are on hold, although it wasn’t immediately clear why.

Citadel has been on a hiring spree here, despite misinformed assertions that he was abandoning New York for Miami (where he indeed moved its headquarters from Chicago).

Griffin has kept some Manhattan landlords on pins and needles over his real estate strategy. He was in talks last year to take 200,000 square feet at Olayan America’s 550 Madison Ave., but no deal was struck.

Citadel is moving many of its staff to 425 Park Ave. from 520 Madison Ave. and from several other locations later this year. It’s also planning a new skyscraper at 350 Park Ave. in partnership with Vornado.

A source emphasized that a potential lease at 280 Park Ave. “was neither done nor dead.”

[Raysiri]

So at what time is this current 350 Park Avenue building lease will expire? 2023 is already nine months in.

[NYguy]

Originally Posted by Raysiri

So at what time is this current 350 Park Avenue building lease will expire? 2023 is already nine months in.

I don’t know what you mean.

[Raysiri]

Like when exactly in 2023 will this building lease expire? Between September and December? Or perhaps later in 2024 this building will finally be demolished?

[rgarri4]

From my 3D model:

[NYguy]

October 8, 2023

[ChiND]

Will this and 175 Park rise? There may be tenant demand, but it doesn’t appear that interest rates will fall any time soon. Unfortunately, the high cost of financing seems to make any large construction project (in any city) unfeasible for quite some time.

[NYguy]

https://nypost.com/2023/10/27/real-e...-in-manhattan/

Developers are betting on the future of NYC with huge new office towers

By Lois Weiss
Published Oct. 27, 2023

...a joint venture between Vornado and Rudin Management is planning a 1,350-foot-tall tower of 1.7 million square feet at 350 Park Ave.

The new project would rise on the site of that Vornado building along with Rudin’s 40 E. 52nd St., as well as a small townhouse they purchased this summer.

Tenant Citadel has an option to purchase a 60% stake and occupy as much as 850,000 square feet, but also has an option to buy the new tower for $1.4 billion and/or to walk away if the venture does not woo another large anchor tenant.

[NYguy]

https://www.bloomberg.com/news/artic...ital#xj4y7vzkg

Michael Smith and Sonali Basak
Nov 14, 2023

Griffin, who is worth $35.4 billion, according to the Bloomberg Billionaires Index, still has high praise for New York, where Citadel maintains a considerable presence and intends to build an office tower. Citadel is planning a massive new Manhattan skyscrapper that could rise to roughly 1,350 feet (411 meters) with 51 office floors and seven terraces.

“The density of talent both in financial services and writ-large in New York City is amongst the top of the world,” he said. “It is really is the epicenter of thoughtful people passionately engaged in their careers.”

[Zapatan]

That's good to know, hope it happens this decade.

[ChiND]

I’m surprised that Citadel still plans to build this tower. Since it has a lot of money, I wonder if it plans to self-finance. I assume that JP Morgan self-financed.

[Zapatan]

Originally Posted by ChiND

I’m surprised that Citadel still plans to build this tower. Since it has a lot of money, I wonder if it plans to self-finance. I assume that JP Morgan self-financed.

That would be awesome, I worry they'd wait 10 years to find a tenant and we wouldn't see this thing soon.

But imagine an NYC where this, 175, 2WTC and 15 Penn all came to fruition, and maybe a few other 1K foot buildings.

Hard to even imagine the insanity.

[ChiND]

Originally Posted by ChiND

I’m surprised that Citadel still plans to build this tower. Since it has a lot of money, I wonder if it plans to self-finance. I assume that JP Morgan self-financed.

Originally Posted by Zapatan

That would be awesome, I worry they'd wait 10 years to find a tenant and we wouldn't see this thing soon.

But imagine an NYC where this, 175, 2WTC and 15 Penn all came to fruition, and maybe a few other 1K foot buildings.

Hard to even imagine the insanity.

I think that Citadel would be the main tenant, so I don’t think that finding a tenant will be an issue.

[The New York Lion]

Originally Posted by Zapatan

That would be awesome, I worry they'd wait 10 years to find a tenant and we wouldn't see this thing soon.

But imagine an NYC where this, 175, 2WTC and 15 Penn all came to fruition, and maybe a few other 1K foot buildings.

Hard to even imagine the insanity.

They will all be built, in time.

I look forward to the day that NYC has 100 supertalls.

[ChiND]

https://www.globenewswire.com/news-r...l-Results.html


350 Park Avenue:

On January 24, 2023, we and the Rudin family (“Rudin”) completed agreements with Citadel Enterprise Americas LLC (“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO (“KG”), for a series of transactions relating to 350 Park Avenue and 40 East 52nd Street.

Pursuant to the agreements, Citadel master leases 350 Park Avenue, a 585,000 square foot Manhattan office building, on an “as is” basis for ten years, with an initial annual net rent of $36,000,000. Per the terms of the lease, no tenant allowance or free rent was provided. Citadel has also master leased Rudin’s adjacent property at 40 East 52nd Street (390,000 square feet).

In addition, we entered into a joint venture with Rudin (the “Vornado/Rudin JV”) which was formed to purchase 39 East 51st Street. Upon formation of the KG joint venture described below, 39 East 51st Street will be combined with 350 Park Avenue and 40 East 52nd Street to create a premier development site (collectively, the “Site”). On June 20, 2023, the Vornado/Rudin JV completed the purchase of 39 East 51st Street for $40,000,000, which was funded on a 50/50 basis by Vornado and Rudin.

From October 2024 to June 2030, KG will have the option to either:

acquire a 60% interest in a joint venture with the Vornado/Rudin JV that would value the Site at $1.2 billion ($900,000,000 to Vornado and $300,000,000 to Rudin) and build a new 1,700,000 square foot office tower (the “Project”) pursuant to East Midtown Subdistrict zoning with the Vornado/Rudin JV as developer. KG would own 60% of the joint venture and the Vornado/Rudin JV would own 40% (with Vornado owning 36% and Rudin owning 4% of the joint venture along with a $250,000,000 preferred equity interest in the Vornado/Rudin JV).
at the joint venture formation, Citadel or its affiliates will execute a pre-negotiated 15-year anchor lease with renewal options for approximately 850,000 square feet (with expansion and contraction rights) at the Project for its primary office in New York City;
the rent for Citadel’s space will be determined by a formula based on a percentage return (that adjusts based on the actual cost of capital) on the total Project cost;
the master leases will terminate at the scheduled commencement of demolition;
or, exercise an option to purchase the Site for $1.4 billion ($1.085 billion to Vornado and $315,000,000 to Rudin), in which case the Vornado/Rudin JV would not participate in the new development.
Further, the Vornado/Rudin JV will have the option from October 2024 to September 2030 to put the Site to KG for $1.2 billion ($900,000,000 to Vornado and $300,000,000 to Rudin). For ten years following any put option closing, unless the put option is exercised in response to KG’s request to form the joint venture or KG makes a $200,000,000 termination payment, the Vornado/Rudin JV will have the right to invest in a joint venture with KG on the terms described above if KG proceeds with development of the Site.

[NYguy]

https://therealdeal.com/new-york/202...-office-tower/

Citadel agrees to buy up $164M in air rights from St. Patrick’s Cathedral
Developer team bought air rights for office tower at 350 Park Ave


Holden Walter-Warner
December 11, 2023

Griffin’s Citadel and Steve Roth’s Vornado Realty Trust agreed to buy up to 525,000 square feet of air rights from the Roman Catholic Archdiocese of New York to facilitate the development of 350 Park Avenue, PincusCo reported.

The contract was signed at the end of January, but was not public until this week because of a petition filed in court, as churches are required to disclose sales of substantial assets.

The development team, which also includes Rudin Management, signed a deal to pay the Archdiocese $312.50 per square foot for the development rights, which are attached to St. Patrick’s Cathedral at 631 Fifth Avenue. The developers also need to contribute $62.50 per square foot to the Public Realm Improvement Fund, a Midtown East group which works to improve the business district. (An appraiser determined the price of the air rights to be $375 per square foot; when the PRIF contribution is subtracted, it comes out to the $312.50 per square foot figure.)

The per square foot basis of the deal is arguably more important than the total purchase price, because that hasn’t been determined. Under the agreement, the developers can buy up to 525,000 square feet of air rights, but could also buy as little as 315,000 square feet. That means the purchase price ranges from $98.4 million all the way up to $164 million.

The agreement lays out annual options for the developers to take more air rights. The deadline to opt into the full 525,000 square feet comes due at the end of 2026.

Representatives from Citadel, Vornado and Rudin did not respond to a request for comment from The Real Deal. A spokesperson for the Archdiocese of New York said that it is the church’s “hope that the money will go to the continued upkeep of the Cathedral.”

Fried Frank’s Jonathan Mechanic represented the buyers in the air rights deal. Mechanic did not immediately respond to a request for comment.

Citadel is working to develop a 51-story tower at 350 Park Avenue, designed by Norman Foster. Griffin’s firm is redeveloping properties master leased from Vornado and Rudin. Citadel would occupy roughly 54 percent of the 1.7-million-square-foot property, which would stand 1,350 feet tall.

https://www.pincusco.com/citadels-ke...st-air-rights/

Citadel’s Kenneth Griffin in contract to pay Archdiocese of NY up to $164M for Midtown East air rights





December 11, 2023

The Roman Catholic Archdiocese of New York signed a contract earlier this year to sell up to 525,000 square feet of development rights from St. Patrick’s Cathedral at 631 Fifth Avenue to a development group including Kenneth Griffin of the hedge fund Citadel Enterprise Americas and Vornado Realty Trust that is planning a 1.7 million square foot tower at 350 Park Avenue, in Midtown East in Manhattan. The development agreement announced in December 2022 also includes Rudin Management.

The developers plan to buy a minimum of 315,000 square feet and a maximum of 525,000 square feet, at at rate of $312.50 per square foot, or $98.4 million up to $164 million. The purchasers also must contribute $62.50 per square foot into the Public Realm Improvement Fund, as a required element of the air rights transfer.

The option, purchase and sale agreement, dated January 31, 2023, mentions representatives from Citadel and Vornado but does not mention Rudin Management. Griffin signed on behalf of the air rights purchaser, which is the entity 350 Park DV LLC.

According to the petition, filed December 8, 2023, in New York State Supreme court as part of a requirement with a church or nonprofit is selling a substantial asset, “By Option, Purchase and Sale Agreement, dated January 31, 2023 (“PSA”), Petitioner agreed, subject to court approval, to sell a minimum of 315,000 square feet of its excess development rights (“EDR”), up to a maximum of 525,000 square feet of its excess development rights appurtenant to 631 Fifth Avenue, New York, New York, with the tax map designation in New York County of Block 1286, Lot 1 (the “Property”), which is occupied by a landmarked building (the “Building”) to 350 PARK DV LLC, or its assigns (the “Grantee”), for the following consideration: $312.50 per square foot of acquired EDR… The consideration to be received by Petitioner on the sale of said real property pursuant to said Purchase and Sale Agreement would be between $98,437,500 and $164,062,500 in cash.” This is part of a complex deal in which Vornado, Rudin and possibly Kenneth Griffin’s Citadel will develop a 1.7 million office tower at 350 Park Avenue.

The agreement lays out several conditions, as laid out in the BBG appraisal, “Within one year of signing the contract, the purchaser must provide a written notice to seller of amount of optioned Development Rights, which may be a minimum of 315,000 square feet. Within 2 years of signing the contract, purchaser is entitled to increase the amount of Optioned Development Rights by up to 100,000, and a maximum of 525,000 square feet. The option may be exercised by Purchaser at their sole discretion at any time prior to 12/31/2026.”

[Crawford]

Nice. Great to see this is moving forward.

Hopefully we'll see demolition in 2024. The buildings are largely empty, or will soon be empty.

[Zapatan]

Agreed, this building rocks and adds another to the 400m+ club.

[NYguy]

Originally Posted by Crawford

Nice. Great to see this is moving forward.

Hopefully we'll see demolition in 2024. The buildings are largely empty, or will soon be empty.

Citadel still has space at 350 Park, and has planned to lease space in the other tower as well. They would need to find that space somewhere else before demo. I imagine the development is in the city's pre-certification process. When they are prepared to move forward on that front, a DEIS will be issued, leading up to the approvals process, which will be a formality (this is part of the Midtown East rezoning).