Vornado Realty Trust is close to landing another large lease at its reinvented Penn 2 office tower.
Universal Music Group is in talks with the landlord to take 300,000 square feet at the recently-redeveloped building, Bloomberg reported, citing sources with knowledge of the discussions. Representatives for Vornado and Universal Music declined to comment, per Bloomberg.
On an earnings call last month, Vornado CEO Steve Roth said the company was weeks away from signing a 300,000-square-foot lease at the 31-story tower and was negotiating a letter of intent for a “major headquarters.”
Roth said he expects the tower, which also counts Major League Soccer as a tenant, to be 80 percent leased by the end of the year, according to Bloomberg.
Roth emphasized that demand for high-end office space was on the rise as only a handful of major new office projects have broken ground in the past five years — the perfect recipe for a landlord’s market.
The office availability rate in Manhattan hit 17.9 percent in the fourth quarter of 2024, the lowest level seen since 2020, according to Avison Young. Class A office space made up the largest share of leasing activity during that quarter.
Roth said he has high hopes that asking rents at Penn 1 and Penn 2 will rise well above $100 per square foot.
– Elizabeth Cryan
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