Citadel’s flirtations with SL Green and Vornado Realty Trust in Midtown Manhattan may end up leaving the office landlords heartbroken.
The hedge fund led by CEO Ken Griffin paused some plans for its office footprint in Manhattan, the New York Post reported. The firm was reportedly in talks to lease 400,000 square feet at 280 Park Avenue, owned by Marc Holliday and Steven Roth’s firms, but those negotiations are on hold.
Citadel is looking for space to temporarily relocate employees at 350 Park Avenue if its plan to replace that building with a 51-story tower move forward.
The reason for the halt in talks is unclear. Market conditions could be a factor, as they often are for landlords and tenants post-pandemic. The report comes a year after Griffin was reported to be eyeing 200,000 square feet at Olayan America’s 550 Madison Avenue, but never leased the space.
If Citadel ultimately takes the 400,000 square feet at 280 Park — a possibility that’s “neither done nor dead,” a source told the Post — it would occupy nearly a third of the 1.2 million-square-foot office tower. It would be a boost for SL Green and Vornado, which could lose a handful of tenants whose leases are set to expire at the end of the year.
Citadel’s office movement in Manhattan has been tricky to track. A few years ago, the company signed a short-term sublease at 520 Madison Avenue. It later started relocating some of its New York employees to L&L Holding Company’s 425 Park Avenue, where it signed a record $300 per square foot deal.
Reports emerged this year about Citadel’s interest in 350 Park Avenue. Citadel was reported to be planning to redevelop properties leased from Vornado and Rudin Management; Griffin’s firm would occupy 54 percent of the 1.7 million-square-foot development, which is likely years away from fruition.
Most prominently, Griffin has relocated the core of Citadel from Chicago to Miami, an ongoing process that hit a bump earlier this year when the hedge fund parted ways with Chicago developer Sterling Bay over its new headquarters in the Magic City.
With many businesses still operating remotely, demand for office space has plummeted. Last month, companies leased 2.5 million square feet in Manhattan, according to Colliers, though a large chunk of that activity stemmed from a single renewal.
Correction: An earlier version of this story said Citadel’s potential deal at 280 Park Avenue would be an expansion of its Manhattan office footprint. Instead, it would be for a temporary relocation of employees.
— Holden Walter-Warner