The Real Deal New York

Park Avenue landlords fret over Citi’s exit

February 10, 2014 12:20PM

399-park

399 Park Avenue and Monday Properties CEO Anthony Westreich

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

4 Responses to “Park Avenue landlords fret over Citi’s exit”

  1. February 10, 2014 at 1:04 pm, HughGass said:

    “The 399 Park Avenue landlord, Boston Properties, said it expects Citibank will sell its 350,000-square-foot space after the lease expires in 2017.”
    Citibank can’t sell space it doesn’t own.

    • February 10, 2014 at 3:09 pm, Sol Goldman said:

      It can if it has an option to extend

      • February 11, 2014 at 12:11 pm, David said:

        Even having an option, one would have look even further into that option Mr. Goldman – it may require them to be in “occupancy” (not just paying rent) which is not uncommon.

  2. February 10, 2014 at 1:28 pm, noclist said:

    388 and 390 Greenwich Street are currently occupied by Morgan Stanley/Smith Barney. Are they going elsewhere?

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