en.wikipedia.org/wiki/Citadel_LLC
2 corrections found
In December 2022, Citadel signed a deal with Vornado Realty Trust and Rudin Management Co. to master lease a new $1.2 billion, 1,500 feet (460 m) office tower to be constructed on Park Avenue in Midtown Manhattan to serve as Citadel's new New York City headquarters.
This misstates the 2022 agreement. Citadel master-leased the existing 350 Park Avenue and 40 East 52nd Street buildings; the $1.2 billion figure referred to a later option valuation for the development site, not a new tower lease.
Full reasoning
Vornado's own December 9, 2022 press release says Citadel "will master lease Vornado's 350 Park Avenue office building ... on an 'as is' basis" and "will also master lease Rudin's adjacent property at 40 East 52nd Street." The same release explains that the $1.2 billion figure was tied to a future option for Kenneth Griffin to acquire a 60% interest in a joint venture that would value the site at $1.2 billion and then build a new tower.
So the article combines two different things into one:
- the actual 2022 master leases of existing buildings, and
- a future development option for a new tower.
It also gives the wrong impression that the 2022 deal was for a 1,500-foot tower. Later New York City planning documents described the proposed 350 Park tower as roughly 1,586 to 1,600 feet and 62–63 stories, showing that the future tower's specifications were separate from the 2022 master-lease transaction.
In short, the 2022 deal was not a master lease of a new $1.2 billion tower to be built; it was a master lease of the existing buildings, plus later options tied to a possible redevelopment site.
3 sources
- Vornado and Rudin Announce Agreements with Respect to 350 Park Avenue and 40 East 52nd Street | Vornado Realty Trust
Citadel will master lease Vornado's 350 Park Avenue office building (585,000 square feet) on an "as is" basis for ten years ... Citadel will also master lease Rudin's adjacent property at 40 East 52nd Street (390,000 square feet). From October 2024 to June 2030, KG will have the option to either: acquire a 60% interest in a joint venture with Vornado/Rudin that would value the Site at $1.2 billion ... and build a new 1.7 million square foot trophy office tower.
- Project Name: 350 Park Avenue (NYC Office of Environmental Remediation)
The Proposed Actions would facilitate the construction of a new, approximately 2,052,208-gross-square-foot (gsf), 1,600-foot-tall (63-story) commercial building with ground floor retail uses and a 12,500-sf public concourse.
- Mayor Adams Unveils new Details of Skyline-Shaping Office Tower, Bolsters Ongoing Resurgence of Midtown Manhattan - NYC Mayor's Office
Vornado, Kenneth Griffin, and Rudin Advance Plans for 62-Story, State-of-the-Art Office Tower With 1.8 Million Square-Feet of Office Space ... Citadel and Citadel Securities as Anchor Tenants.
In November 2006, Citadel became the second hedge fund to publicly issue bonds to investors in the form of senior unsecured debt totaling $2 billion, in an arrangement managed by Lehman Brothers and Goldman Sachs.
The 2006 public bond sale was $500 million, not $2 billion. The $2 billion figure referred to a broader notes program or possible borrowing capacity, not the amount of senior unsecured debt actually sold in that public issue.
Full reasoning
This sentence overstates the size of Citadel's 2006 public bond issuance. Citadel's own history page describes the transaction as "a $500 million public bond sale". A contemporaneous Institutional Investor report likewise says Goldman Sachs and Lehman Brothers managed "the $500 million, five-year bond".
Reporting at the time also discussed Citadel possibly borrowing up to $2 billion through a broader program, which is different from saying the public issue itself totaled $2 billion. So the statement is incorrect as written: the public bond deal was $500 million, not $2 billion.
3 sources
- Who We Are - Citadel
2006 — Citadel executes the first-ever debt placement by a major hedge fund in a $500 million public bond sale, considered a groundbreaking move at the time.
- Citadel May Make History With Bond Issue | Institutional Investor
Citadel has tapped Goldman Sachs and Lehman Brothers as lead managers of the $500 million, five-year bond, which will be offered this week after several investor presentations.
- Will Citadel doom the prime broker boom? | Reuters Breakingviews
The Chicago hedge fund may borrow some $2bn through a landmark bond issue, reducing its dependence on Wall Street brokers for leverage.