Universal Music Group Finalizes 336K-SF Deal at Vornado’s Penn 2
By Isabelle Durso April 1, 2025 11:55 am
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A deal by Universal Music Group (UMG) for new digs at Vornado Realty Trust’s Penn 2 office tower has been finalized after weeks of negotiations.
UMG signed a 22-year lease for 336,000 square feet of office and studio space on the entire fourth through seventh floors of the 31-story Midtown building, according to the company and Colliers’ first-quarter 2025 office report.
UMG will also occupy a ground-floor retail space at the property along Seventh Avenue for a “future premium retail experience dedicated to serving music superfans,” the company said.
The deal represents a relocation for UMG, which will leave its current 242,505-square-foot office at Jack Resnick & Sons’ 1755 Broadway, where its lease isn’t set to expire until 2028, as Commercial Observer previously reported. UMG will complete the move in 2027.
“UMG’s relocation of its New York offices to the new Penn 2 tower reflects our vision and ambition,” Boyd Muir, chief operating officer at UMG, said in a statement. “Located in the heart of Midtown Manhattan and literally adjacent to Madison Square Garden, one of music’s most storied venues where so many of our artists perform to a packed house, Penn 2 will serve as an ideal nexus for our employees, artists and songwriters.”
The asking rent was unclear, but Vornado CEO Steven Roth said during the company’s fourth-quarter earnings call in February that Penn 2 is leasing in the range of $100 per square foot.
It’s also unclear who brokered the deal. Vornado declined to comment, while spokespeople for Colliers and Cushman & Wakefield, which handles leasing for Vornado at Penn 2, did not immediately respond to requests for comment.
News of the deal comes after Vornado recently completed a redevelopment of Penn 2 — which sits directly above Pennsylvania Station — that includes a new facade, lobby and rooftop lounge, according to the landlord’s website. It also added a 430-foot glass canopy leading into the 1.8 million-square-foot office tower dubbed the Bustle.
Other tenants of Penn 2 include professional sports league Major League Soccer, which signed a lease for 126,000 square feet across two floors of the building in March 2024.
That, along with UMG and Madison Square Garden Entertainment’s deal at Penn 2, led Roth to feel optimistic about the property during its earnings call in February.
“I’m predicting that Penn 2 will likely be 80 percent leased by year-end,” Roth said during the call. “We are achieving rents here above our underwriting.”
Update: This story was updated to include the terms of the deal and a statement from UMG.
Isabelle Durso can be reached at idurso@commercialobserver.com.
