Vornado Foresees $350-per-Foot Rents at Park Avenue Office Tower: Earnings

Vornado Realty Trust announced Tuesday morning that it could levy as much as $350 per square foot at one of its latest office developments, at a time when rents over $300 a square foot at trophy properties are becoming the norm.

350 Park Avenue, which Vornado is developing with Ken Griffin’s Citadel and Rudin, may be renting for $350 per square foot, and Roth said he has confidence the building will still see leasing due to lack of supply and strong demand in the Class A office market.

The news came during Vornado’s second-quarter earnings call. One investor on the call, after adding up all investments in the structure, asked for confirmation that Vornado would start the asking rent at $350, which Vornado Chairman Steven Roth confirmed as accurate.

“The fact that there’s a scarcity of new supply, and the combination of the construction costs, interest rates, et cetera, require a very high rent for a new building,” Roth said. “That will cause the great, well-located, older buildings to go up and drive [leasing] enormously. And obviously, that’s the reason we bought Park Avenue Plaza.”

Vornado began developing the property at the end of the fourth quarter of 2025, aiming for 1.85 million square feet of office.

During the earnings call, Vornado reported that net income decreased to $16.4 million in the second quarter of 2026, compared to $743.8 million over the same period in 2025, despite strong performance elsewhere on its balance sheet.

Funds from operations (FFO), however, reached $144 million in the second quarter, compared to $120.9 million year-over-year. Revenue saw an increase as well, rising to $462.2 million in the three months ending June 30, in contrast to $441.4 million in the second quarter of 2025.

Vornado attributed the slide in net income to an $803.2 million master lease of 770 Broadway to New York University, but executives and investors on the call did not seem fazed by that individual metric.

Vornado leased about 348,000 square feet of office space and 61,000 square feet of retail during the second quarter, and its portfolio was 90.8 percent occupied with office assets at 92.2 percent occupied and retail properties 77.8 percent occupied.

Roth said there are 67,000 square feet of lease deals in the Penn District alone pending signature at the time of the call, and Vornado expects those assets to reach full occupancy.

Mark Hallum can be reached at mhallum@commercialobserver.com.