Attracting Tenants
Biederman believes that Vornado’s thoughtful approach is paying off. Emergence of the tech industry and proximity to more recent attractions like the High Line and Hudson Yards have also helped make the PENN District’s and Vornado’s long-term investment even more appealing.
“Everything looks fresh and new here. It is obviously good for New York, it attracts new tenants that lead to more tax dollars for the city,” he says. As a business improvement district, the 34th Street Partnership supplements city services, tackling issues with litter, crime, graffiti, care of parks, tourist services, and neighborhood improvement.
Biederman says these additional services are particularly important at this time. “Right now there are concerns about many American cities going in the wrong direction and we are remedying that with a very sophisticated security force.”
Part of Vornado’s master plan for the PENN District includes updating iconic New York properties, adapting them to new industries, enhancing their sustainability, and strengthening the overall character of the neighborhood.
The Farley Building, formerly the city’s main post office branch, has retained its iconic Beaux-Arts architecture with Corinthian columns and classical steps, but has been revamped into a modern office space. The Farley Building will soon be the home to Facebook, who signed a lease for all 730,000 square feet of the office in August 2020— a major bet on Manhattan’s resurgence after COVID-19.
“Facebook first joined New York’s vibrant business and tech community in 2007. Since that time, we’ve continuously grown and expanded our presence throughout the city. The Farley Building, in the PENN District, will further anchor our New York footprint and create a dedicated hub for our tech and engineering teams. We look forward to being a part of this iconic New York City landmark’s future for years to come,” says Nick Raby, director of real estate and facilities, North America, at Meta, Facebook’s parent company.
Along with Facebook, the PENN District is attracting other top companies looking to bring their workforce back to the office and setting the tone for post-pandemic commerce. Apple Inc. signed a lease for a 330,000 square foot space at Vornado’s neighboring PENN 11
in 2020.
In another vote of confidence, Madison Square Garden Entertainment inked a 20-year lease in November 2021 for a 428,000 square feet headquarters at Vornado’s PENN 2, the 31-story building situated atop the current Penn Station.
“Vornado has been a great partner and we are pleased to have reached this agreement, which keeps our corporate headquarters at PENN 2—in the heart of the city next to our Madison Square Garden Arena,” James Dolan, executive chairman and CEO of MSG Entertainment, said at the time of the announcement.
In April 2021, work began on the redesign by MdeAS Architects and recladding of the mid-century modern structure, replacing the dark glass exterior with a modern glass curtain wall. PENN 2 will connect to another key district component—PENN 1—making the two buildings a 4.4 million square foot campus including a 280-person town hall for tenant presentations and events.
PENN 2’s redevelopment also creates 430 feet of new frontage along Seventh Avenue, as well as a second-level café adjacent to the office lobby and an 8,000-square-foot restaurant situated at a revamped 33rd Street pedestrian plaza, known as Plaza 33.
Amenity-Driven Work Culture
PENN 1, the building that occupies the area between 33rd and 34th Streets and 7th and 8th Avenues, is another renovation nearing completion mixing old and new New York.
The existing, 1970s Class A 55-story tower with more than 2.5 million square feet is undergoing a major redevelopment. As of July 2021, PENN 1 has a new North Lobby with high ceilings, a landscaped plaza, and a digitally-enhanced main “social” staircase connecting tenants and amenities.
Vornado introduced more than 200,000 square feet of tenant amenities, launching its new WorkLife amenity program—a hospitality-driven, work-first environment across the PENN campus. With a 35,000 square foot wellness and fitness center, multiple work lounge areas, full service-dining, bar, and grab-go food options, WorkLife creates an ecosystem that allows tenants to focus “on both work and self-care.”
Gone are the days of sitting in a cubicle for 10 hours, Weiss says. Coffee on hand, comfortable seating, lunch to-go, and support throughout the workday will allow employees to work in a “hospitality-centric office, closer to a hotel,” Weiss says. “It’s a terrific environment for the employee when they come into the office every day,” he adds.
Another Vornado first: access to all of the components of these office amenities via an accompanying app— Live.Work.Do. The phone application allows tenants from the PENN campus to access the on-site offerings, with everything from dining perks, entertainment, food and beverage ordering, safety alerts, and wellness tips with daily spotlights like #TrainerTipTuesdays and #WellnessWednesdays. The app will also expand and adapt as the PENN District grows and additional phases are completed.
According to Weiss, the ongoing COVID-19 pandemic and prevalence of work-from-home across industries have only accelerated the shift towards amenity-driven office culture.
“We believe when people come back to the office, they want to come into a very comfortable setting which provides everything in their office building that they otherwise were getting at home,” Weiss says. Vornado has also placed an emphasis on outdoor spaces throughout the district.
District for All
Vornado currently owns about 10 million square feet of property in the PENN District and has extensive, continually evolving plans for its next steps. “Everything is happening in parallel—improving the transportation hub, renovating buildings, new construction, upgrades to the streetscape,” Weiss says. “We are collaborating with the city, state, railroads, and local community to create the neighborhood of the future.”
Vornado will also continue the renovation and upgrading of all existing assets in the PENN District. Completion of PENN 1 is slated for spring of this year, and PENN 2 aims to wrap up in the second half of 2023.
For Vornado and its investors, the growth proposition remains limitless. Its architects Foster + Partners recently revealed updated designs for PENN 15, the tallest of its five proposed new office towers at 1,200 feet. The 2.7 million square foot “supertall” tower will feature terraces throughout the tower to maximize light and air and its unique design will allow for flexible office configurations. Other plans for the district include more than 10 acres of public plazas and sidewalks, as well as more than one million square feet of new retail.
“Personally, it is truly satisfying to still be here 30 years later to see all of this happening,” says Weiss, who likens each PENN District component to “chapters” of a story Vornado is building over time. “When the story is complete, tenants and stakeholders will see the quality of the future ecosystem, and the entire city will continue to reap the benefits,” he says.
