After Meta shrunk its space at 770 Broadway, Vornado Realty Trust has reached a “handshake” deal with an unidentified “user” for a long-term, masterlease of the building.
CEO Steve Roth on Tuesday hinted at an “important transaction” at the building during the real estate investment trust’s second quarter earnings call.
He would not say how the deal would be structured, nor what it would mean for existing tenants, aside from noting that the masterlease would cover the more than 1 million square feet of office in the building.
Vornado will retain Wegman’s space in the Greenwich Village building. The grocery chain inked a 30-year lease for the former 82,000-square-foot K-Mart storefront in 2021.
Facebook parent company Meta shrunk its space in the building after its lease for 275,000 square feet expired in June. The company still has 500,000 square feet in the building, of the building’s 1.2 million square feet. A representative for Meta did not immediately return a message seeking more information.
Roth struck a hopeful tone during Tuesday’s call, citing bond market activity and expectations that interest rates will drop further. He said it is still “almost economically impossible to build new” office space, which is leading to a landlords’ market.
The company reported 1.3 million square feet of office leasing activity in New York during the quarter, at an initial asking rent of $131.37 per square foot, with a weighted average lease term of 9.7 years.
During the first quarter earning call, the company’s executives suggested that sales of its Fifth Avenue properties were likely.
On Monday night, the company announced that it sold a portion of 666 Fifth Avenue to Uniqlo for $350 million. Vornado’s joint venture owned a fee condominium interest in 17,295 square feet of Uniqlo’s 90,732 square feet space in the building. Vornado has a 52 percent interest in the venture. The sale is expected to close in the first quarter of 2025.
Vornado still owns five assets on Fifth Avenue.
“My bet is this won’t be the last user purchase on Fifth Avenue,” Roth said Tuesday.
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