Billionaires atop big investment firms like Citadel and Tiger Global are snapping up pricey NYC offices in a rebuke of remote work

  • Financial firms like Tiger Global, Citadel, and Stone Ridge are expanding their New York offices.
  • The activity reflects a belief that the office is key to continued success.
  • Meanwhile, much of corporate America is grappling with when and how to bring workers back.
  • See more stories on Insider’s business page.

High-flying financial players such as hedge funds, private-equity firms, and other boutique investment companies are expanding their Manhattan offices like it’s 2019.

The activity reflects the robust fortunes of the upper end of an investment industry that has boomed during the pandemic. The hedge-fund industry, for example, had its best first half of a year in over 20 years, some estimates suggest.

The deals also run counter to the larger office market, where leasing has remained moribund as much of corporate America has been reluctant to commit to office space, grappling with when and how to get employees back to the workplace amid a new phase of the pandemic.

Here are the financial firms planning to expand:

  • Tiger Global, a roughly $80 billion investment firm that manages hedge funds and venture-capital investments in the technology sector, is in negotiations to expand its headquarters at 9 W. 57th St., where it has about 50,000 square feet, according to several sources. Tiger is expected to pay over $200 per square foot, more than double the average rent in Midtown Manhattan of roughly $80 per square foot. The active startup investor is helmed by Chase Coleman, a 46-year-old billionaire from Long Island who lives on Park Avenue in Manhattan.
  • Stone Ridge Asset Management, a $10 billion asset manager, just signed on for nearly 100,000 square feet at One Vanderbilt, a brand-new skyscraping tower next to Grand Central Terminal in Manhattan’s Midtown East neighborhood. The company took four floors in the 1,400-foot-tall building, agreeing to rents that increase over the life of the 15-year deal to $245 per square foot — three times the average Midtown rent — according to terms of the lease that a source shared with Insider. The space is several times as large as the office the company occupies elsewhere in Midtown.
  • Citadel, a major investment company run by the billionaire Kenneth Griffin, is in talks to expand its presence at 425 Park Ave., an ultra-high-end Midtown office tower under development where Citadel already has pledged to occupy about 300,000 square feet. One source speculated that the firm was in talks to add as much as 70,000 square feet. Another knowledgeable source said Citadel could also seek to add the space in another office building in Midtown.
  • The large Manhattan landlord Vornado Realty Trust just signed three deals at the recently built 512 W. 22nd St. in West Chelsea, another Manhattan neighborhood. Hunter Point Capital, Capricorn Investment Group, and Pura Vida Investments each committed to nearly 12,000 square feet, paying rents above $100 per square foot — a premium rate.

A spokeswoman for Tiger declined to comment. A spokesperson at Stone Ridge could not immediately be reached. A spokesman for Citadel declined to comment.

Scott Panzer, a leasing executive at JLL who handles leasing deals at 9 W. 57th St., told Insider that three boutique financial tenants at the tower were expanding in the building and that two other such firms were negotiating to move into the skyscraper. Panzer would not comment on whether Tiger was among the tenants expanding.

Billionaire investment managers expect workers to come back to the office

Workers have increasingly sought more flexibility in coming back to the office. Amid a hot job market and a shortage of skilled workers, a growing number of companies have rolled back plans to require employees to return and have instituted flexible work policies.

Financial firms and the billionaire fund managers who run them, however, have a different set of rules, according to people familiar with the culture in that rarified segment of the investment market.

“In the larger corporate world, there will likely be a match between some employees that want to work remotely and employers that are fine with it,” said Ben Friedland, a vice chairman at the real-estate-services firm CBRE who specializes in leasing high-end office space to financial-services tenants. “At the higher end of the market, principals feel the collaboration and idea generation that takes place when physically together is critical, and there is an expectation for those people to return.”

Providing top-tier spaces with soaring views, amenities, and health-related aspects like filtered air and ample light is part of the enticement these firms are spending on to draw workers back.

“These guys are masters of the universe,” one leasing executive quipped. “They’re not going to let COVID have an impact on them. They’re above that.”

Financial firms are a bright spot in an otherwise slow office market

The deals signify a burst of activity in an office-leasing market that has otherwise been moribund. About 6.35 million square feet have been leased in Manhattan since the start of 2021, according to data from CBRE, putting the year on pace for an activity total that’s a fraction of totals before the pandemic; in 2018 and 2019, for instance, 32.4 million and 31.6 million square feet were leased in Manhattan.

Some tenants have been reluctant to make office-leasing decisions as questions loom over whether remote work will become a fixture and whether it may allow some firms to reduce their footprint as fewer employees come into the office every day.

But some top-tier financial firms feel confident in their business and see a return to the office as key to their continued success, making them more willing to commit to space. The vacancy rate in a collection of 200 higher-end office buildings in Manhattan tracked by CBRE was 11.8%, less than the 13% vacancy rate across the market.

“Most of these financial firms view the office as a necessity,” said Steve Durels, an executive vice president at SL Green, which codeveloped One Vanderbilt. “What has crystallized in the minds of investment managers is the office is an extension of their brand, a way for them to create a company identity.”

Durels said he could not comment on the firm’s recent deal with Stone Ridge.

The deals also show that while financial companies have sought to open offices in other areas of the country, such as South Florida, many will seek to not only retain but expand their presence in investment hubs like New York.

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