Universal Music Set to Lease 300K-SF Office at Vornado’s Penn 2

Universal Music Group (UMG) is nearing a deal to move into a 300,000-square-foot office at Vornado Realty Trust (VNO)’s Penn 2 office tower.

Negotiations are ongoing, but if the deal goes through, UMG would leave its current 242,505-square-foot office at Jack Resnick & Sons’ 1755 Broadway, where it has a lease running through 2028, according to Bloomberg, which first reported news of the lease negotiations.

Vornado declined to comment, while a spokesperson for UMG did not immediately respond to a request for comment. 

The potential deal comes after Vornado recently completed a redevelopment of the 31-story Penn 2, located directly above Pennsylvania Station, that includes a new facade, lobby and rooftop lounge, according to the landlord’s website.

Vornado CEO Steven Roth said during the company’s fourth-quarter earnings call last month that the firm was “only weeks away” from signing a 300,000-square-foot lease at the Penn District building, but he did not provide details at the time.

Other tenants of Penn 2 include Madison Square Garden Entertainment and professional soccer league Major League Soccer, which took 126,000 square feet across two floors of the building last March.

“I’m predicting that Penn 2 will likely be 80 percent leased by year-end,” Roth said during the February earnings call. “We are achieving rents here above our underwriting.”

And UMG will be another big lease for Vorando to close this year. Vornado recently finalized its master lease to New York University at the 1.2 million-square-foot 770 Broadway — a deal that Roth said would relieve Vornado’s balance sheet of $700 million in debt on the asset, CO reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.