Vornado Realty Trust announced on Tuesday that rents of up to $350 per square foot could be achieved in one of its newest office developments, 350 Park Avenue. This comes at a time when rental prices exceeding $300 per square foot are increasingly becoming standard for prime properties.
The 350 Park Avenue project, which Vornado is developing jointly with Ken Griffin's Citadel and Rudin, could therefore generate rents of $350 per square foot. Steven Roth, Vornado's CEO, expressed confidence that the building would achieve a high occupancy rate despite the high rental prices. He attributed this to a lack of new supply and strong demand in the market for prime office space.
The announcement was made during Vornado's second-quarter earnings call. An investor during the conference asked for confirmation of the expected rental prices of $350 and above, which were confirmed by Vornado Chairman Steven Roth. Roth stated: “The scarcity of new supply, combined with construction costs and interest rates, demands very high rents for new buildings.” He added that this would “cause the great, well-located, older buildings to increase in value and enormously drive leasing. That is obviously why we bought Park Avenue Plaza.”
Vornado began development of the property, which is to comprise 1.85 million square feet of office space, at the end of the fourth quarter of 2025. During the conference call, Vornado reported a decrease in net income to $16.4 million in the second quarter of 2026, compared to $743.8 million in the same period of 2025. This occurred despite an overall strong balance sheet performance. However, Funds from Operations (FFO) reached $144 million in the second quarter, compared to $120.9 million in the previous year. Revenue also rose to $462.2 million in the three months to 30 June, as opposed to $441.4 million in the second quarter of 2025.
Vornado attributed the decline in net income to an $803.2 million master lease agreement for 770 Broadway with New York University. Executives and investors, however, remained unfazed by this single metric. In the second quarter, Vornado leased approximately 348,000 square feet of office space and 61,000 square feet of retail space. The overall portfolio was 90.8 per cent occupied, with office space at 92.2 per cent and retail properties at 77.8 per cent occupancy. Roth mentioned that lease agreements for 67,000 square feet are pending signing in the Penn District alone. Vornado expects these assets to be fully utilised.
