12.11.23 - Citadel, Vornado and Rudin in contract to buy $164M in air rights from St. Patrick’s
' Citadel Securities, the firm led by billionaire investor Ken Griffin, wants to build one of the tallest towers in Midtown. How Citadel and its partners plan to hit such lofty heights is now clearer.
Citadel and development partners Vornado Realty Trust and Rudin Management are in contract to snap up as much as 525,000 square feet of air rights from St. Patrick’s Cathedral on Fifth Avenue, a significant haul of unused development space that would cost $164 million, according to a new court filing.
Structured as an option that would need to be exercised by January 2025, the deal could also be for a smaller amount of air rights, as little as 315,000 square feet for $98 million, depending on what’s needed, the filing says.
The developers apparently inked the deal last January. But it only just came to light by way of a petition filed Friday in Manhattan Supreme Court. The petition is required because any real estate transactions involving nonprofits like churches need the blessing of the state’s attorney general.
According to plans unveiled earlier this year, Citadel, Vornado and Rudin are seeking to build a soaring 1,350-foot tower containing 1.7 million square of space on a multiparcel site on Park Avenue in Midtown between East 51st and East 52nd streets.
The project, which would have the address 350 Park Ave., is perhaps a surprising bet on the office market at a time of persistently high vacancy rates fueled by remote-work habits. But the tower wouldn’t open till 2032, suggesting the developers are playing a long game in the belief that office trends will be back to their prepandemic levels by then.
Three office buildings currently stand on the development site. They include Vornado-owned 350 Park Ave., a 585,000-square-foot mixed-use tower from 1961 that already has Citadel as a tenant, as well as Rudin-owned 40 E. 52nd St., a 385,000-square-foot structure from 1976 where Citadel has also leased space.
The third building, 39 E. 51st St., is a 5-story townhouse that Vornado and Rudin jointly purchased earlier this year in an apparent bid for a bigger footprint for the new high-rise, to be designed by architect Norman Foster’s Foster + Partners firm.'