Citadel Supports Manhattan Real Estate With Record Deal

Sep 16 2015 | 3:04pm ET

Never count hedge funds out of a big property deal. The Manhattan real estate market continues to surge on the backs of a major deal by hedge fund Citadel.

Ken Griffin’s Citadel announced earlier this week it has leased 200,000 square feet in a new luxury office tower at 425 Park Avenue. The building will take up an entire block along between East 55th and East 56th Streets and rise 900 feet. According to terms of the deal, Citadel will be paying a record level of rent: $300 per square foot in a deal that will include its luxury penthouse.

"This is the highest standard of building in the 21st century on the grand boulevard of America," said David Levinson, chairman and CEO of property developer L&L Holding Co. to Crain’s. "It's blue on the Monopoly board. No one has created something like this."

The deal surpasses the previous per-square footage rental in Manhattan by approximately 50%, according to Crain’s. Previous rentals that surpassed that $200 level are 9 West 57th St., the General Motors Building, and 667 Madison Ave.

It’s clear that that Citadel can afford the property. The firm manages more than $26 billion in assets, and its founder Ken Griffin was hailed the new king of hedge funds by CNBC in May.

The New York Post says that the building will have an open restaurant in the tower, run by restaurant partners Daniel Humm and Will Guidara of 11 Madison Park and Nomad.  Amenities will include a lounge solely for tenant chauffeurs, mediation rooms, and fresh-pressed juice every day. 

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