The Real Deal New York

Vornado to start first phase of Penn Plaza redevelopment before year’s end

REIT plans 140K sf addition to Two Penn
By Rich Bockmann | October 30, 2018 06:00PM

New renderings of 2 Penn Plaza

Vornado Realty Trust plans will soon kick off the first phase of its “megacampus” redevelopment at Pennsylvania Plaza.

The real estate investment trust expects to start work before the end of the year on the $200 million renovation of One Penn Plaza, Vornado CEO Steve Roth said on the company’s third-quarter earnings call Tuesday morning.

The plan includes a new double-height lobby for the 2.5 million-square-foot building, and is projected to take two years to complete. And Vornado is already moving tenants into One Penn Plaza from nearby Two Penn Plaza, where the landlord plans to replace the building’s entire curtain wall when McGraw Hill’s lease expires in 2020.

Roth said the company will vacate the building’s lower 10 floors, and Vornado plans to construct an addition that sits 45 feet above the street level and sticks out 70 feet from the building.

“It will serve a dual purpose. It will be striking, creating a huge covered plaza in front of our Penn Two and the main entrance to Penn Station, and bring the neighborhood into the modern age,” he said. “And at the same time, it will create 140,000 square feet of very valuable, new 22-foot high best in class creative space.”

Vornado expects the Two Penn overhaul to take 24 to 30 months. As part of its plan to combine the two buildings into a 4.4 million-square-foot campus, Vornado will create a three-block plaza along Seventh Avenue.

Meanwhile, Gov. Andrew Cuomo last month announced plans to build a new entrance to Penn Station on 33rd Street, in between Vornado’s two buildings.

Vornado in 2016 released renderings by architect Bjarke Ingels for Two Penn Plaza. Roth said the REIT will release new renderings on its website on Wednesday, though an investor presentation from last month gave an early look at what the design might include.