Is hedge fund Citadel having second thoughts about its record office lease at L&L Holding Company’s 425 Park Avenue?
The company has the right to get out of its lease because construction is delayed, Crain’s reported, and has hired JLL to look for office space. Officially Citadel is committed to the luxury office development, but according to Crain’s, some industry insiders wonder whether the company is quietly looking for alternatives.
“It’s an opportunity to check the market and re-examine whether the lease they signed two years ago is still the best deal for the firm,” one source told the news outlet.
Other sources told Crain’s that Citadel is merely looking for space to move into until the building is finished, and that the company is actually considering expanding at the new development. “There’s no question that Citadel remains committed to 425 Park Avenue,” L&L’s CEO David Levinson said.
The $1 billion, 47-story office development was supposed to be completed by late 2018, but instead construction will likely continue into 2020. The delay would allow Citadel to terminate its lease in July.
The hedge fund agreed to take 200,000 square feet in the tower in 2016, paying a record $300 per square foot for the top two floors.
Citadel’s head Ken Griffin, who appears to be a bit of a penthouse aficionado, also reportedly signed a contract to buy a $200 million apartment at 220 Park Avenue South. [Crain’s] — Konrad Putzier