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 trio formed a joint-venture partnership that will give Citadel room to grow in the city and bring an iconic new office skyscraper to Midtown Park Avenue — despite forecasts that work-from-home will make offices obsolete.
“We think we have seen the peak in work from home,” Roth said Tuesday during Vornado’s first-quarter earnings report.
“With each passing week, the office buildings feel more like 2019. And we believe it’s just a matter of time before everyone is back for good,” he added.
As spelled out in Vornado’s earnings report, Citadel took a 10-year “master” lease on the real estate company’s 350 Park Ave., which has 585,000 square feet.
The rent starts at $35 million a year, or $61.50 per square foot — and will rise at an undisclosed rate over time.
The master lease means that tenants currently in the building will pay rent to Citadel.
The deal includes no free-rent period, unlike many in today’s weak market.
While Griffin moved Citadel’s headquarters from Chicago to Miami because of the Windy City’s crime and quality-of-life crisis, the deal shows he isn’t done with Manhattan by a long shot.
Citadel also master-leased Rudin’s adjacent 390,000 square-foot 40 E. 52nd St. Terms were not disclosed.
Both buildings are expected to be empty of tenants other than Citadel within 10 years so they can be torn down for a new, supertall, 1.7 million square-foot skyscraper.
Vornado and Rudin are also buying the small building next door, 39 E. 51st St., for $40 million to enlarge the footprint for the cloud-buster, where Griffin would lease at least half of the space.
The arrangement gives Griffin the option to buy out both Vornado and Rudin for a total of $1.4 billion by June 2030 and develop the tower himself.
The real estate companies could also require Griffin to buy their stakes for $1.2 billion.
Citadel already leases a significant amount of space at 425 Park Ave., where it’s the anchor tenant, as well as at 350 Park.
CBRE tristate CEO Mary Ann Tighe — who does not represents either Citadel or the developers at the site — said their plans “reinforce two New York City fundamentals.”
“When government creates an intelligent, targeted, commercially viable, ‘as-of-right’ real estate program for developers — in other words, a carrot and not a stick — positive results happen fast,” she said, referring to new East Midtown zoning that permits larger structures than in the past in exchange for public-realm improvements.
“[And] when employers experience the ambition, diversity, creativity, and focus of the New York City workforce, they choose to grow here. No one moves to New York to spend more time at the beach,” Tighe added.
Meanwhile, Griffin’s plan for a $1 billion skyscraper in Miami seemed to hit a speed bump recently when he dropped the project’s original developer and is searching for another.
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