Money managers are driving up rents for the toniest of Manhattan offices, in some cases before construction has even been completed.
Chicago-based hedge fund manager Citadel LLC, for example, signed a deal for 200,000 square feet for its New York employees in an office tower being built at 425 Park Ave.
Citadel's lease includes occupancy of the building's penthouse at a rent of $300 per square feet, 50% more than previous peak rents in the city, which had topped out at about $200 per square foot.
“The financial sector has become much more active again leasing space, and there is a growing group of tenants ... who are willing to pay very high numbers to be in the very prestigious buildings,” said Kenneth McCarthy, senior managing director and chief economist, Cushman & Wakefield Inc., New York.
Hometown firms are getting into the action more directly for their own office buildings.
William A. Ackman, founder and CEO of Pershing Square Capital Management LP, for example, is buying an office building at 787 11th Ave. with a partner for $255.5 million. Mr. Ackman intends to add new office space atop the property as well as a private rooftop pool and tennis court for his employees.
