6.27.23 - New York Landlord Vornado Bets $1 Billion That More Commuters Will Return
' Employees frequently cite the dreaded commute as their biggest reason for avoiding the office. But one of America’s most prominent landlords is featuring the commute as a selling point for a 9-million-square-foot real-estate project surrounding Manhattan’s Penn Station.
Vornado Realty Trust is spending $1.2 billion overhauling two of its office buildings near the midtown transit hub, which serves commuters from several subway lines, Long Island, New Jersey and, starting in 2027, Westchester County, N.Y., and Connecticut.
“We think this is the most important development in the city and perhaps way, way beyond the city,” the New York firm’s chairman, Steven Roth, said in an interview.
Roth told Vornado investors that Friday office work is “dead forever” and “Monday is touch-and-go.” But he believes workers will continue to commute a few days a week so long as it is an easy journey. He calls train rides to Penn Station a “one-seat commute” because office employees won’t then need to take the subway to their offices.
Some of the early results at Penn 1 look promising. Vornado has leased 700,000 square feet in the building since its recent $450 million renovation, pushing rents to $100 from $60 a square foot. The building is nearly fully leased, Vornado said. Tenants include Samsung Electronics, Cisco Systems and Hartford Financial Services. '