Vornado Realty Trust Chairman Steve Roth has declared a "victory lap" for the company's PENN 1 and PENN 2 office buildings, citing significant leasing successes and strong returns on investment.
PENN 1 has achieved over 90% occupancy following a recent 38,000-square-foot expansion deal with payroll and HR management platform Gusto. The asking rent for this space was $135 per square foot, according to sources.
Roth highlighted in Vornado's second-quarter earnings call that the company leased 978,000 square feet of Manhattan office space in the first half of the year, with an average starting rent of $105 per square foot. He noted that Vornado invested $200 per square foot to renovate PENN 1, resulting in a $50 per square foot increase in rents, which he described as a 25% return on investment.
The transformation of PENN 1, an initially obsolescent building, involved a $450 million investment to create a 2.5 million-square-foot trophy property featuring a new glass curtain wall. PENN 2, located across from Madison Square Garden, was also part of this revitalization effort.