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Category ArchiveSteven Roth

Facebook Grows Again at Vornado’s 770 Broadway

Facebook has again increased its presence at 770 Broadway after taking an additional 78,000 square feet of space at the Noho office building, landlord Vornado Realty Trust announced on its fourth quarter earnings call today.

The social media giant signed a lease last week for the entire third floor at the 15-story, 1.16-million-square-foot property between East Eighth and East Ninth Streets. The deal grows Facebook’s total footprint at the building to 513,000 square feet, Vornado Chairman and Chief Executive Officer Steven Roth said on the earnings call.

The space was made available for Facebook after Vornado bought Kmart out of its lease on the floor, which Roth said had 18 years remaining at rents of $33.50 per square foot. Kmart still has 82,000 square feet at 770 Broadway, including most of the property’s ground-floor retail space.

Asking rent and length of lease in the Facebook deal were not disclosed. Vornado’s Josh Glick and Edward Riguardi handle leasing at 770 Broadway in-house, while Facebook’s broker representation was not immediately clear. Representatives for Facebook did not immediately return a request for comment.

More to follow.

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

Andrew Cuomo Floats Plans to Fix Penn Station, Subways

A week after claiming he doesn’t have much control over the Metropolitan Transportation Authority, Governor Andrew Cuomo gave a speech in which he reiterated the need to upgrade Pennsylvania Station and challenged the MTA to fix New York City’s aging subway system.

During his address at the CUNY Graduate Center, Cuomo touted his public-private plan to revamp James A. Farley Post Office into Moynihan Station, while lamenting the impending chaos that will occur when Amtrak slashes train service for six weeks this summer in order to make repairs. He announced the creation of a task force to address the impending “summer of hell,” which would focus largely on solutions that affect suburban commuters, like high-speed Long Island ferries and privately owned bus service.

“The intolerable state of disrepair in Penn Station and its ripple effect of delays and dysfunction throughout the subway system have reached a breaking point, and we must enact this comprehensive action plan now to find both short and long term solutions to these growing challenges, upgrade outdated infrastructure and meet the needs of current and future generations of New Yorkers,” Cuomo said.

The Penn Station task force will have some familiar faces, including Richard LeFrak, chief executive officer of LeFrak, and Steven Roth, chairman of Vornado Realty Trust (both members of President Donald Trump’s infrastructure panel and longtime Trump friends), Congressman Peter King, Tom Wright of the Regional Plan Association, and former New York City Planning Commissioner Carl Weisbrod.

Of course, Vornado is part of the team already chosen by the governor to redevelop the Farley Post Office. The corporation also controls nine million square feet of office space around Penn Station.

The governor’s 143-slide presentation and speech highlighted the fact that revamping Penn Station, constructing the cross-Hudson Gateway Tunnel and converting the post office into a new train hall would be an ideal project for Trump’s trillion-dollar infrastructure plan. The entreaties came only a few days after Cuomo penned a letter to Trump, requesting emergency federal funding to help with short-term repairs and a longer-term rebuilding of Penn Station.

Cuomo also proposed that Amtrak and the federal government should transfer control of the beleaguered station to one of three entities: New York State, the Port Authority of New York and New Jersey, or a private “qualified” contractor. Meanwhile, Amtrak Chief Executive Officer Wick Moorman said the rail operator has no plans to cede control of Penn, telling The New York Post’s editorial board earlier this week: “Our name is on the deed.”

Then Cuomo switched gears to the subway system. The 112-year-old hodgepodge of train lines has had several major meltdowns in the past two months, sparking a torrent of negative press and angry editorials directed at the governor, who controls the MTA, the agency that runs the subways, the Long Island Railroad and the Metro North trains.

“The truth is that the subway system is already at its breaking point and now trying to compensate for the dysfunction of Penn is just too much,” he said. “We have 64,000 delays per month.”

The governor announced an “MTA Genius Transit Challenge,” which would solicit proposals to replace the subway’s early 20th-century signal system, refurbish aging subway cars, and design technology that will improve wifi and cell signals in stations and tunnels.

Source: commercial

Google Expands by 60K SF at Vornado, Related’s 85 10th Ave in Chelsea

Google has activated an option to take an additional 60,000 square feet of office space at Vornado Realty Trust and Related Companies85 10th Avenue, Vornado Chief Executive Officer Steven Roth said on the real estate investment trust’s earnings call this week.

The tech behemoth—which in 2014 signed on for 180,000 square feet at the 11-story, 618,000-square-foot property between West 15th and West 16th Streets—agreed to exercise an option to take its total footprint at the former Nabisco factory to 240,000 square feet, a Google spokesman confirmed to Commercial Observer.

A Vornado spokesman confirmed the transaction but declined to provide further comment. The Real Deal first reported news of Google’s expansion at 85 10th Avenue.

Asking rents, lease length and brokers were not disclosed. Google’s initial lease in 2014 was secured at a starting and effective rent of just under $77 per square foot and runs through February 2026, according to CoStar Group.

The building, which is located near the High Line and overlooks the Hudson River, is owned through a joint venture between Vornado and Related. Other tenants at 85 10th Avenue include defense and intelligence firm L3 Technologies, data services provider Telehouse International and Moët Hennessy USA.

Source: commercial