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Category Archive1 Penn Plaza

Siemens Moving NYC Offices to Vornado’s 1 Penn Plaza

German manufacturing giant Siemens is reportedly moving its New York City offices to Vornado Realty Trust’s 1 Penn Plaza.

The company has agreed to take 35,000 square feet on the 11th floor of the 57-story, 2.7-million-square-foot office tower, which occupies the block bound by West 33rd and West 34th Streets and Seventh and Eighth Avenues, Crain’s New York Business reported Tuesday.

The deal includes an option for Siemens to take the entire, roughly 60,000-square-foot floor should it require additional space, according to Crain’s, with the German conglomerate reportedly paying rents in the high $60s per square foot. Siemens plans to begin occupying its new space by this July; the company’s current New York City corporate office is located at Mitsui Fudosan America’s 527 Madison Avenue in Midtown, according to its website.

Peter Van Duyne of Cushman & Wakefield represented the tenant in the transaction, while Vornado was represented in-house by Josh Glick and Jared Silverman. Representatives for C&W and Vornado did not immediately provide comment.

Siemens will occupy space left vacant by U.S. Customs and Border Protection, according to Crain’s, with the federal agency having relocated its offices to 1 World Trade Center in the Financial District.

The massive 1 Penn Plaza is the centerpiece of Vornado’s sizable portfolio of commercial real estate assets in the area surrounding Pennsylvania Station, which include 2 Penn Plaza, 11 Penn Plaza, 330 West 34th Street and 7 West 34th Street. And alongside partners Related Companies and Skanska, the real estate investment trust is undertaking the sprawling redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall, which will include 730,000 square feet of office space and 120,000 square feet of retail.

Other tenants at 1 Penn Plaza include Cisco Systems, GTT Communications, TradingScreen and Fuse Media.

Source: commercial

Vornado Talks Up Moynihan Train Hall for Amazon HQ2

Vornado Realty Trust’s redevelopment of the James A. Farley Post Office Building into the new Moynihan Train Hall is “front and center” in New York City’s bid to house Amazon’s new HQ2 headquarters, Vornado said on its third-quarter earnings call today.

Vornado, which is redeveloping the former post office building with partners Related Companies and Skanska, cited the project’s 730,000 square feet of office space and 120,000 square feet of retail offerings as key facets of its pitch to host Amazon—which has sent municipalities across the country into a sweepstakes to host the Seattle-based e-commerce giant’s second headquarters complex.

Steven Roth, Vornado’s chairman and chief executive officer, said the company was “pleased” to see Manhattan’s West Side included in the New York City Economic Development Corporation’s proposal to Amazon as one of four city neighborhoods that could accommodate HQ2 (the other three being Lower Manhattan, Downtown Brooklyn and Long Island City), with the city touting the area’s robust transit offerings and ample office space in the Hudson Yards, Penn Plaza and Midtown West areas.

Roth noted that Moynihan Train Hall would be able to meet Amazon’s “near-term needs” for roughly 500,000 square feet of office space—though whether it would be able to provide that space by next year, as indicated by Amazon, is uncertain given the Moynihan project’s 2020 targeted completion date. (Amazon will eventually require up to 8 million square feet of office space for HQ2.)

But Roth and other Vornado executives noted that the project’s large, 250,000-square-foot office floor plates would be “extraordinarily attractive” to a company used to the sprawling, campus-like headquarters occupied by many major West Coast-based tech conglomerates.

They noted how Vornado’s senior management team visited Silicon Valley this past summer “to understand the nature of what these campuses are”—citing Facebook’s Frank Gehry-designed, roughly 10-acre headquarters as a “one-story building [with a] 450,000-square-foot footprint,” as well as the 820,000-square-foot floor plates at Apple’s headquarters. Both facilities also feature sizable outdoor, park-like amenities.

Moynihan Train Hall, they said on the call, is “truly unique” in its “ability to deliver a horizontal campus in New York, with great roof deck space in the heart of the city with views all around.”

But Roth added that regardless of “whether New York wins the HQ2 race or not, Amazon will have a long-term significant presence” in the West Side “for years to come,” with the company having committed to large blocks of space at Vornado’s 7 West 34th Street as well as Brookfield Property Partners’ Manhattan West development.

On a broader scale, Vornado reported a bullish outlook for its core New York City office and retail assets. It cited more than 450,000 square feet of office leases across 33 separate transactions signed at “record-breaking” average starting rents of $83 per square foot, as well as 97 percent occupancy across its city office portfolio.

Roth described demand for New York City office space as “robust” and coming from a diverse cross-section of industries. David Greenbaum, the real estate investment trust’s New York division president, noted that office-using employment in the city remains strong and will be able to “absorb the new supply coming online in the next five years,” with the financial services sector having “finally reached its pre-financial crisis level” of employment in the third quarter.

Greenbaum said Vornado has a “negligible amount” of office lease expirations planned over the remainder of the year, with the REIT’s 1 Penn Plaza comprising “over a third of our lease expirations over the next two years.” The company is currently “finalizing our plans” for an ambitious repositioning of the office tower, which Greenbaum said is expected to commence next summer.

Roth also discussed 666 Fifth Avenue in Midtown, which Vornado co-owns with Kushner Companies and which has drawn much attention this year due to the property’s uncertain financial future (as well as its ties to former Kushner Companies head and now-Trump administration senior adviser Jared Kushner).

The building, while located on a “very attractive piece of real estate,” is “over-leveraged,” Roth said, acknowledging rumors “about tearing the building down and doing all manner of fairly grand development schemes.” But he labeled such ambitious plans as likely “not feasible,” adding that the property will probably remain in its current state as an office building via capital improvement plans that he described as “a work in process.”

Vornado also leased around 38,000 square feet of retail space across its Manhattan portfolio in the third quarter, with the most notable deal being Sephora’s 16,000-square-foot relocation to 1535 Broadway in Times Square. Greenbaum said the company is also in talks “for another flagship lease, with a major national retailer, for the remaining 12,000 square feet” of retail space at the property’s base.

“Our upper Fifth Avenue and Times Square [retail] assets are buttoned up for term with great credit tenants,” Roth said, noting that the company has only one lease expiry in its Manhattan high street retail portfolio coming in the next five years—fashion retailer Massimo Dutti’s location at 689 Fifth Avenue, which is due to expire in 2019 “at below market rent.”

Vornado has also identified roughly $1 billion in assets that it plans to sell in the coming years, excluding residential condominium sales at its 220 Central Park South tower in Midtown, Roth said.

The 75-year-old Roth also acknowledged that he had heart bypass surgery in August—a procedure that raised questions about the publicly traded company’s future leadership and succession plan.

But the Vornado head attempted to dispel concerns about his health and the company’s leadership, saying that he is “now better than new, and back to work.”

Source: commercial

Cloud Networking Services Provider GTT Grows to 19,500 in 1 Penn Plaza

GTT Communications has signed a deal to expand its footprint at Vornado Realty Trust‘s 1 Penn Plaza to 19,500 square feet just a few months after the publicly traded company moved into the building, Commercial Observer has learned.  

The Virginia-based firm, which provides cloud networking services to companies around the world, currently occupies 11,400-square-foot offices on part of the 10th floor of the 2.7-million-square-foot tower on West 34th Street between Seventh and Eighth Avenues.

GTT will add 8,100 square feet on the same floor in early 2018, according to information provided by the tenant’s broker, Savills Studley.

A spokeswoman for the brokerage declined to disclose the terms of the deal, however, a variety of tenants have signed leases in the building at rates in the upper $60s per square foot and the low- to mid-$70s per square foot, according to CoStar Group.

“GTT’s recent acquisitions added significant headcount to their New York office, and expanding into additional, contiguous space was the best solution for the growing company to maintain and enhance their collaborative culture,” Savills Studley’s Christopher Foerch, who handled the deal for GTT alongside colleagues Jeffrey Peck and Daniel Horowitz, said in a prepared statement.

GTT moved from a 5,000-square-foot office at 1270 Broadway between West 32nd and West 33rd Streets to 1 Penn Plaza in July.  

Since its move, GTT has acquired a variety of companies, including network services provider Global Capacity for about $160 million ($100 million in cash and nearly 1.9 million shares of stock) in September, the company announced at the time. Global Capacity has offices in Massachusetts, Illinois, Colorado, California and the U.K.

And GTT acquired Midtown South-based data management provider Transbeam for $28 million on Oct. 3. Transbeam currently has offices at 8 West 38th Street between Fifth Avenue and Avenue of the Americas.

It wasn’t clear if Global Capacity and Transbeam would be moving. A spokeswoman for the company did not immediately return a request seeking information, and Savills Studley’s spokeswoman declined to disclose that information.

Jared Silverman and Josh Glick, who represented Vornado in-house, did not return a request for comment via a Vornado spokesman.

GTT has 18 offices around North America, and additional outposts in Asia, Europe and South America, according to its website.

Source: commercial