Vornado Reaches Deal to Build $1.2B Park Avenue Tower
A joint venture between Vornado Realty Trust and Rudin Management Co. has cut a deal with Citadel Enterprises America that will facilitate the building of a new 1.7M SF office tower on NYC’s Park Avenue.
Citadel will master lease 350 Park Ave., a 585K SF office tower owned by Vornado, and 40 E. 52nd ST., a 390K SF building owned by Rudin. According to the terms of the deal, the companies have agreed to a 10-year “as is” lease with an annual rent of $36M.
Vornado also is partnering with Rudin to acquire 39 E. 51st, an adjacent 11K SF building. The plan is to combine the three properties and build a new tower on the consolidated sites. Vornado purchased 350 Park Avenue in 2006 for $542M.
Citadel, the company that denounced the crime rate in Chicago when it moved to Miami, has an option to acquire a 60% stake in the $1.2B development that will rise on the merged properties of 350 Park Ave., 40 E. 52nd St. and 39 E. 51St. in Manhattan’s Midtown East market.
Citadel will have the right to exercise its option for a majority of the partnership from October 2024 until June 2030—and to make the decision to launch the project—with Vornado retaining a 36% share and Rudin becoming a 4% partner with a $250M preferred equity interest.
Citadel’s option includes a 15-year, 850K SF anchor lease for the Miami firm at the 1,500-foot-tall office tower designed by Fostar + Partners that is planned to replace what is known as the BlackRock building, a
Citadel also has the option to acquire the site for $1.4B, a transaction that would sever the other partners from the joint venture project.
After telling Bloomberg that he was leaving Chicago because the crime problem there is out of control, Griffin named Sterling Bay as the developer that will build a new 1000-foot headquarters tower for Citadel on a Bayfront site at 1201 Brickell Bay Drive in Miami.
Earlier this year, Citadel acquired the site and an adjacent office building for a combined total of nearly $650M.
Griffin, worth an estimated $31B—which gets you a big headline in Bloomberg whenever you want to trash Chicago in the former NYC mayor’s media outlet—now owns more than $1.3B in residential and commercial real estate in South Florida.
In September, the hedge-fund billionaire was revealed as the buyer behind the $107M purchase of a four-acre waterfront estate in Coconut Grove.
