The Real Deal New York

With big lease expansion, Citadel kills rumors it’s spooked by 425 Park delays

Hedge fund is taking on an additional 124K sf at L&L Holding's tower
January 08, 2019 08:30AM

From left: 425 Park Avenue, Citadel CEO Ken Griffin, and L&L Holding Company CEO David Levinson (Credit: Wikipedia)

Citadel is expanding its foothold at L&L Holding Company’s 425 Park Avenue, after doubts were raised last year about the hedge fund’s commitment to the $1 billion office development.

Due to construction delays that had pushed the project’s completion from 2018 to 2020, Ken Griffin’s $30 billion hedge fund had the option to terminate its lease in July. Instead, Citadel is now adding 124,000 square feet to its previous 211,400-square foot lease, according to the New York Post.

Part of Citadel’s earlier lease at the $1 billion, 47-story tower included the top two floors of the building, which reportedly went for a record $300 per square foot. The expansion gives the company a total of 16 floors at the building, and brings the development to 48 percent leased – with Citadel as the only tenant so far.

Among various complications, one factor that caused delays at the full-block project was the city’s byzantine building code, which required L&L to keep 25 percent of the existing building’s structure to avoid downzoning. Integrating the old and new structures proved to be a greater challenge than expected.

JLL’s Alex Chudnoff, Joseph Messina and Matthew Astrachan represented Citadel in the deal. When Citadel hired JLL last year to look for office space, some industry insiders said the company was merely looking for space to move into before 425 Park’s completion. The possibility of an expansion was also raised at the time.

Citadel was among the few hedge funds that prospered in 2018, with its flagship Wellington fund gaining over 9 percent. [NYP] — Kevin Sun