Citadel Said to Be Eyeing Large Office Lease at 280 Park Ave

Ken Griffin’s game of musical chairs in Manhattan’s office market appears to be continuing on, at least for now.

Griffin’s hedge fund Citadel is in talks to take 400,000 square feet at 280 Park Avenue, Crain’s reported, citing two unnamed sources. Such a move would be a boon to the city’s two largest commercial landlords, SL Green and Vornado Realty Trust, which co-own the 1.2 million-square-foot tower.

Whether or not the lease actually happens remains to be seen, and there are reasons to be skeptical. After signing a short-term sublease for 24,000 square feet at 520 Madison Avenue a few years ago, Citadel is relocating some of its 1,500 New York employees to L&L Holding Company’s new tower at 425 Park Avenue. Citadel signed a record $300-per-square-foot deal for the 47-story tower’s penthouse in 2015, months after the building broke ground.

Then, there’s 350 Park Avenue. This year, details emerged about Citadel’s hopes for a 51-story, Norman Foster-designed tower at the site, where it would redevelop properties leased from Vornado and Rudin Management. Citadel would occupy 54 percent of the property’s 1.7 million square feet, though the project could still be a decade away from coming to fruition.

Finally, there’s Citadel’s broader relocation from Chicago to Miami, where two months ago, Griffin cut ties with Sterling Bay on plans to build the company a new headquarters. Citadel isn’t retreating from South Florida, however, instead choosing to handle some of the work in-house and partner with another developer for the Brickell project.

280 Park Avenue is 98 percent occupied, according to Crain’s, though six tenants are set to leave by the end of the year. Citadel declined to comment to the publication. Vornado and SL Green did not immediately respond to a request for comment from The Real Deal.

Manhattan’s office leasing environment continues to challenge landlords. Tenants took 7.4 million square feet in the first quarter, according to Colliers, but net absorption was negative 1.2 million square feet and average asking rents declined across all three submarkets Colliers tracked.

— Holden Walter-Warner