Vornado, Rudin Partner on $1.2B NYC Office Project

350 Park Ave.

A joint venture between Vornado Realty Trust and Rudin Management Co. has reached a series of deals intended to clear the path for development of a $1.2 billion Midtown Manhattan office tower.

At the heart of the proposal are agreements with Citadel Enterprise Americas LLC and an affiliate of Kenneth C. Griffin, Citadel’s Founder & CEO, regarding neighboring office buildings. Citadel will master lease two properties. The larger of the two, 350 Park Ave., is a 585,000-square-foot office tower acquired by Vornado for $541.5 million in 2006, according to CommercialEdge data. Also involved is 40 E. 52nd St., a 390,000-square-foot property owned by Rudin. The companies agreed on a 10-year “as is” lease and an annual rent of $36 million.

READ ALSO: How Deals Will Fare in 2023

Vornado also partnered with Rudin to acquire a 10,974-square-foot office building at 39 E. 51st St. for $40 million. The joint venture plan to combine 350 Park Ave., 40 E. 52nd St. and 39 E. 51st St. for a 1.7 million-square-foot, 1,500-foot-tall office building designed by Foster + Partners, as previously reported by The New York Yimby.

Options and details

From October 2024 to June 2030, Griffin has the option to acquire a 60 percent interest in the development site and proceed with the project, with Vornado owning 36 percent and Rudin 4 percent of the partnership and a $250 million preferred equity interest in the venture.

The option also includes a 15-year, 850,000-square-foot anchor lease at the proposed project for Citadel’s and affiliates’ primary office and the end of previous master leases upon demolition. Griffin can also acquire the site for $1.4 billion without the joint venture being part of the project.

Vornado’s portfolio includes more than 20 million square feet of office properties, primarily in New York City. Besides the current projects, other notable moves include securing refinancing deals totaling $3.2 billion for multiple properties, including two Manhattan office buildings encompassing 2.2 million square feet.