Vornado Opts In At 350 Park Avenue

Steven Roth isn’t taking the money and running.

The Vornado Realty Trust CEO said Tuesday that the REIT will exercise its option to acquire its maximum 36 percent stake in the planned 2 million-square-foot office tower at 350 Park Avenue, joining Ken Griffin, who controls a 60 percent interest, and Rudin, which will own the remaining 4 percent.

“We intend to shortly exercise our investment option to participate in this deal at our maximum ownership percentage of 36 percent,” Roth said during the company’s second-quarter earnings call, adding that Citadel will anchor the project with roughly 1 million square feet, more space than previously announced.

The announcement ends speculation over whether Vornado would sell its interest in the development or remain a long-term partner. Roth dismissed suggestions from some analysts that the company should “take the money and run.”

“No, no, no, that would be incredibly short-sighted,” he said. “In our business, there is no better place to invest than prime Park Avenue.”

The joint venture values Vornado’s contribution of the existing 65-year-old office building and underlying land at roughly $900 million, according to Roth. He added that the development has lined up a $3.3 billion construction loan.

The partnership is also considering selling a roughly 25 percent stake in the venture to another investor, he said, adding the joint venture closing is expected to take place in September. Demolition at the site is already underway. 

Roth said the brokerage community is already fielding inquiries from prospective tenants seeking large blocks of premium office space timed to the building’s delivery and rents are expected around $350 per square foot.

The project is one of the city’s highest-profile office developments in a thin pipeline. The partners filed permit applications for the 62-story project late last year, after the City Council approved rezoning the site. 

Earlier this year, the Citadel founder provided a $400 million loan for the project after taking his majority stake in the venture. But that was before Mayor Zohran Mamdani took a swipe at the hedge fund titan during his announcement of the city’s pied-à-terre tax, prompting Griffin to threaten to walk away from the project altogether.

Roth said during Vornado’s first-quarter earnings call in May that the REIT had the option to be “a participant or a seller” in the project, adding that “Citadel has to be committed.” 

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