Ken Griffin Moving Forward With 350 Park Avenue Office Tower Development
By Nick Trombola April 16, 2024 11:47 am
reprints
Citadel founder Kenneth Griffin is still surging ahead with his plans to build a 62-story office tower in Midtown East, despite office vacancies hitting record highs while demand for spaces in New York City is low.
Griffin, along with developers Vornado Realty Trust (VNO) and Rudin, have filed plans with the city to build their 1.8 million-square-foot office tower at 350 Park Avenue. The tower is expected to be completed by 2032.
Citadel and its affiliate, Citadel Securities, will anchor the building, with plans to take some 850,000 square feet, according to Bloomberg, which first reported the news Tuesday.
The property has an unusual history over the past few years, to say the least. In late 2022, Citadel, Griffin and the developers reached an agreement to master-lease Vornado’s 585,000-square-foot tower, which currently occupies the site, on a 10-year “as-is” basis. The hedge fund also opted to master-lease Rudin’s adjacent 390,000-square-foot building at 40 East 52nd Street.
At the same time, Vornado and Rudin formed a joint venture with Citadel to buy 39 East 51st Street for $40 million, with the ultimate goal of combining the three properties to develop the new 62-story tower.
Before the COVID-19 pandemic, Vornado had planned to build a 1,500-foot-tall tower at 350 Park on its own. Yet in November 2022, the CMBS loan on the project was sent to special servicing due to a “complex consent request,” according to a Vornado spokesperson at the time. The agreement to build the new tower at the site was likely the reason.
The partners will also need to purchase the air rights from two churches nearby in order to build the tower — St. Bartholomew’s Church and St. Patrick’s Cathedral — contributing $150 million toward the maintenance of the houses of worship, which are both designated historic places.
The new tower, which will also include a 12,500-square-foot public concourse, will be designed by London-based architecture firm Foster + Partners.
“350 Park Avenue … will reinforce New York City as the financial capital of the world and Park Avenue as the premier business boulevard,” Steven Roth, chairman and CEO of Vornado, said in a statement.
New York City Mayor Eric Adams meanwhile is riding high on the development of the tower, helping to unveil the plans at the Association for a Better New York’s Power Breakfast Tuesday morning. Adams said the tower will be home to 6,000 jobs, including about 2,100 from Citadel and Citadel Securities, and its development will add nearly $36 million to the city’s East Midtown Public Realm Improvement Fund.
“Today, we are doubling down on our efforts to build a ‘new’ New York with a project that will help supercharge our economy and expand New York City’s iconic skyline,” Adams said in a statement.
Even amid all the dire news about vacant office space, Citadel has been going all in. It bought a vacant waterfront property in Miami at 1201 Brickell Bay Drive in 2022, which could potentially serve as an office tower for Citadel, and signed a five-year lease for 90,000 square feet of temporary office space at 830 Brickell that same year.
In February, Citadel tapped Paul Darrah, the former head of New York City real estate for Google, to manage the hedge fund’s office footprint. Darrah was a key part in Google’s decision to acquire Chelsea Market for $2.4 billion to add to its office presence in that neighborhood.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
