Demolition starts on the block
Demolition crews are working the block between East 51st and 52nd Streets in Midtown East. Scaffolding and blue netting cover the 30-story tower at 350 Park Avenue, the 23-story building at 40 East 52nd Street and the five-story building at 39 East 51st Street, per New York YIMBY’s report of 7 July 2026. Our Town reported on 9 July 2026 that site signage names Waldorf Demolition as general contractor and carries a March 2027 date for the teardown, with nearly half the block scaffolded.
What replaces it
YIMBY and Our Town give 1.8 million square feet of Class A office space across 64 stories, with capacity for 6,000 employees on a 53,000-square-foot site. Foster + Partners designed the tower as seven rectangular glass volumes that step back toward the west. The lower four setbacks carry landscaped terraces, and the final three form a tiered crown. The lobby reaches 40 feet. Field Operations designed a 12,500-square-foot public plaza along the property, and the base holds 16,000 square feet of ground-floor retail.
Heights differ by document. YIMBY and Our Town publish 1,414 feet. Engineering News-Record reported on 17 February 2026 that the environmental review describes a building rising about 1,600 feet, and that the Department of Buildings filing lists a high-rise determination of 1,112.43 feet from the highest occupied floor to the lowest fire department access level. ENR also reported the new building application filed on 3 October 2025 under the umbrella address 340 Park Avenue, total building floor area of 2,077,720 square feet, roughly 1.57 million square feet of office and trading-floor space, and an approximately 82-month construction period.
The partnership and the money
The project belongs to Vornado Realty Trust, Rudin and Ken Griffin. Citadel, Griffin’s firm, bought a 60 percent stake in the joint venture, per Our Town. Vornado and Rudin can hold an interest between 23 and 40 percent, with Vornado’s share running between 21 and 36 percent, per The Real Deal’s report of 10 February 2026. Commercial Observer reported on 23 February 2026 that Vornado will hold an equity stake of between 20 and 36 percent and will contribute its land plus several hundred million dollars in cash. The same report states that Vornado plans to capitalize Citadel’s master lease into a long-term asset while the property collects no rents.
Griffin turned down an option to buy the assembled development site for $1.4 billion, and Vornado and Rudin held matching options they did not exercise, per Commercial Observer. “Ken Griffin wanted to accelerate the option exercise,” Vornado Chief Financial Officer Michael Franco said on an earnings call. “Which we were fine with.” The Real Deal reported the option gave Griffin until June 2030 to take a 60 percent stake or buy the site.
Developer materials put the budget at $4.5 billion, per YIMBY and Our Town. Commercial Observer’s February 2026 report carried an estimated cost of $6 billion. Our Town reported that Vornado paid $1.2 billion for the three buildings. ENR reported a $1.2 billion put option tied to the assembled site, with Vornado and Rudin due to decide by July 2026 whether to keep a minority stake.
Vornado’s 8-K filing of 9 February 2026 describes a 1.85-million-square-foot office tower anchored by Citadel, per ENR.
The anchor tenant
Citadel and Citadel Securities hold at least 850,000 square feet, close to half the office space, per YIMBY and Our Town. Commercial Observer reported that Vornado representatives say the anchor’s appetite is growing. The lease consolidates workplaces for more than 2,000 New York employees, and the old 350 Park Avenue reaches full vacancy as a second wave of Citadel staff moves to Brookfield’s 660 Fifth Avenue. Citadel leased 504,000 square feet at 660 Fifth Avenue, per Commercial Observer’s report of 2 January 2025.
Vornado is marketing spaces of at least 50,000 square feet. “Tenants who[se leases] are expiring in ’31, ’32 and ’33 are already asking us to present the project,” Glen Weiss, Vornado’s vice president of office leasing, said on an earnings call.
The approvals and the air rights
The City Council approved the special permits on 25 September 2025 by a vote of 48 to zero, after ULURP began in mid-March 2025. The developers bought $150 million of air rights: $98.4 million for St. Patrick’s Cathedral air rights in December 2023 and $53.3 million for St. Bartholomew’s Church air rights three months later, per the developer slide deck Our Town reviewed. YIMBY reported a contribution of more than $35 million to the East Midtown Public Realm Improvement Fund, and Our Town read over $30 million from the same deck.
ENR reported that the project completed ULURP with Midtown Special District approvals allowing the transfer of development rights from landmarked properties, a public concourse bonus and qualifying site waivers. The same report describes an all-electric mandate on the site, with heating and hot water systems required to run on electricity, and soil, groundwater and vapor testing required before construction. The DOB filings do not yet list a general contractor.
What it means for hotel demand
PwC’s Manhattan Lodging Index for the first half of 2026 ties the office recovery to hotel demand. Manhattan office leasing reached 17.7 million square feet in the first half of 2026, up 12.6 percent on the same period in 2025, and PwC expects that recovery to lift corporate travel and midweek hotel demand. Midtown East occupancy fell 3.6 percent in the first half, one year after the district led Manhattan, per the same index. The tower is targeted for delivery in 2032, six years after the teardown began.