In the wake of Citigroup’s decision to move its global Park Avenue headquarters after many years, Midtown office landlords are concerned about the fate of the market in that once-dominant corridor.
The banking giant signed a deal in December to relocate from 399 Park Avenue at East 53rd Street to a two-building complex at SL Green Realty’s 388 and 390 Greenwich Street, as previously reported. The 399 Park Avenue landlord, Boston Properties, said it expects Citibank will hand off its 350,000-square-foot space after the lease expires in 2017. Now Boston will have to face the obstacle of securing a new flagship tenant.
Monday Properties CEO Anthony Westreich — whose firm owns 230 Park Avenue — called the decision “disconcerting” because, he told the Wall Street Journal, “In the Park Avenue corridor certainly financial service firms have been dominant in this market place.”
Office vacancies in the corridor rose to 11.6 percent from 9.1 in 2013’s first quarter, according to Cushman & Wakefield data, cited by the Journal. Rents have dipped to $79.19 per square foot in 2013’s fourth quarter from $80.42 per square during 2013’s first quarter. [WSJ] — Mark Maurer