Vornado scored a 38,000-square-foot expansion at PENN 1 by payroll and HR management platform Gusto, which brought the redesigned tower to over 90% leased. The asking rent was $135 per square foot, sources said.
But while Gusto’s move is relatively modest, it’s revealing to hear Vornado chairman Steve Roth’s comments in the company’s second-quarter earnings call.
Vornado leased 978,000 square feet of Manhattan offices in the year’s first half, Roth said — most with an average starting rent of $105 per square foot.
He declared a “victory lap” for both PENN 1 and sister property PENN 2 across from Madison Square Garden.
At PENN 1, “broadly speaking, we invested $200 per square foot to achieve a $50 a foot uptick in rents, which when all gets said and done, is a 25% return,” Roth said.
Vornado spent $450 million to turn the once obsolescent building into a sparkling, 2.5 million square-foot trophy with a dramatic new glass curtain wall.