The New York office market has a new messiah: Ken Griffin.
Vornado Realty Trust and Rudin Management have reached a deal with Griffin’s Citadel that allows the developers to construct a 1.7-million-square-foot Midtown East tower, Vornado announced Friday.
The three parties were reported in the spring to be discussing the project, which would call for the buildings at 350 Park Avenue and 40 East 52nd Street, known as the BlackRock building, to be razed.
Citadel will master-lease Vornado’s 585,000-square-foot 350 Park Avenue for 10 years, with an initial annual rent of $36 million.
Citadel will also master-lease Rudin’s adjacent 390,000-square-foot property at 40 East 52nd Street.
Vornado will form a joint venture with Rudin to buy 39 East 51st Street for $40 million and will combine that site with 350 Park Avenue and 40 East 52nd Street.
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The deal gives Griffin the option to acquire a majority interest in the joint venture — at a $1.2 billion valuation — to build a 1.7 million-square-foot tower at the site, or exercise an option to buy the site outright for $1.4 billion and go it alone on the development.
Vornado and Rudin began talking about a collaboration at the Park Avenue and East 52nd Street site years ago. A brochure found by YIMBY revealed drawings by Foster + Partners of the prospective tower.
Griffin’s office ambitions go beyond New York. In Miami, he tapped Sterling Bay to develop an office skyscraper for Citadel that could rise to 1,000 feet.