Posted Oct 23, 2013, 8:06 PM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 51,900
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Looks like we may be waiting longer...
http://stream.wsj.com/story/latest-h...9/SS-2-362445/
Citigroup Nears Renewing Lease on New York Space
CitigroupInc. is close to a deal to renew its lease and consolidate some of its offices at a large lower Manhattan office complex owned by SL Green Realty Corp.
By Eliot Brown
October 23, 2013
Quote:
After a lengthy search for office space, Citigroup Inc. is close to a deal to renew its lease and consolidate some of its offices at a large lower Manhattan office complex owned by SL Green Realty Corp., according to multiple executives briefed on the search.
If the renewal deal is completed at 388-390 Greenwich St., it would be one of the largest leases in years in New York. If Citigroup had decided to leave, SL Green would have been left to fill the entire 2.6 million square-foot property.
The deal isn’t final and could still collapse, people familiar with the situation said. The bank had also considered other locations, including a new office tower planned by developer Related Cos. on Manhattan’s far west side and the planned 1,349-foot 2 World Trade Center tower that is awaiting a major tenant to move forward, the executives said.
The complex, which is in the TriBeCa section of lower Manhattan, includes a 40-story tower and 10-story building. It used to be the headquarters of Travelers Group, which merged in 1998 with what was then Citicorp. Today, Citigroup houses its investment bankers, traders and others in the property, which would undergo an overhaul if the deal is finalized.
Citigroup’s headquarters are in midtown Manhattan at 399 Park Ave, and the bank leases hundreds of thousands of square feet in other buildings, including 601 Lexington Ave., formerly named Citicorp Center, and 111 Wall St. The bank would move employees from some of its other offices in the area to the TriBeCa complex in a move to shed space.
The deal comes at a time when the financial-services industry is shrinking in New York, much to the disappointment of real-estate owners and city officials who count on the sector to be a major engine of growth. Millions of square feet of space that used to be occupied by banks like J.P. Morgan Chase & Co. and Bank of America Corp. are on the market.
Citigroup zoomed in on SL Green’s buildings after a search that lasted more than a year. In recent weeks, Citigroup narrowed its focus to 388-390 Greenwich and 2 World Trade Center, which is being planned by Silverstein Properties Inc. SL Green and Silverstein each made presentations to Citigroup’s board within the past two weeks, people familiar with the presentations said. In recent days, Citigroup informed Silverstein that its tower was out of the running and began negotiating only with SL Green, the executives said.
Despite the extensive search, many onlookers considered a renewal always to be the likeliest of outcomes given that new construction would be more expensive—a hard sell at a time when the financial sector is looking to find savings wherever it can.
Specifics of the deal being discussed with SL Green couldn’t be learned, although people familiar with the discussions said the landlord offered to remake the 1980s-style lobby of 388 Greenwich, among other changes.
The complex was built in the late 1980s for Shearson Lehman Brothers. That bank was bought by Travelers. In late 2007, Citigroup sold the complex to SL Green and a Canadian pension-fund investor now known as Ivanhoe Cambridge for $1.6 billion and signed a lease that runs through 2020. It is unclear how many years the new lease would add to that lease.
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