Posted Apr 14, 2026, 11:19 AM
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New Yorker for life
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Join Date: Jul 2001
Location: Borough of Jersey
Posts: 56,638
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More arguments for this tower, and others in the district...
https://commercialobserver.com/2026/04/p...he-center-of-manhattans-office-universe/
Penn Station Becoming the Center of Manhattan’s Office Universe
Larry Getlen
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A new report from Cushman & Wakefield shows that almost a quarter of Manhattan office relocations in 2023, 2024 and 2025 ended up in the Pennsylvania Station submarket, and that most tenants relocated while expanding their space.
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Financial services firms took 24 percent of this space, with professional services firms just behind at 23.7 percent, technology taking 18.8 percent, and media and information taking 10.7 percent. The remaining space was divided along categories including media, legal, real estate, entertainment and more.
The report notes that 14 office buildings have been developed or renovated in the Penn Station submarket over the past decade, adding or augmenting around 23 million square feet of highly desirable office space, and expanding submarket inventory by 124.2 percent. These buildings have a current total vacancy rate of just 6.5 percent. For comparison, a separate C&W report pegged Manhattan’s overall vacancy rate at 19.9 percent by the end of March.
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“Prior to this modernization of the area, there were only six Class A buildings in the Penn Station area. Now there are 20, and there’s less B and C,” said Albert. “Since Hudson Yards began in 2016, the whole area has been transformed, and then, in 2023, the renovations of Penn 1 and Penn 2 really modernized the area. It helped to alleviate a lot of overcrowdedness and just became very attractive to a lot of tenants.”
Looking ahead, six additional conversions or new developments are currently in the works that will expand Class A inventory in the submarket by another 30.1 percent over the next seven years.
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“Penn Station has firmly established itself as one of the most competitive and compelling office submarkets in New York City, thanks to a decadelong transformation,” Bruce Mosler, chairman of global brokerage for C&W, said in a statement. “Projects like Vornado’s Penn District, including the Penn 1 and Penn 2 office towers, are the new gateway to the West Side, offering connectivity to Hudson Yards and Manhattan West. These projects underscore how thoughtful redevelopment and transit-oriented planning can fundamentally reposition an entire neighborhood and attract sustained tenant demand.”
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C&W also noted that companies relocating to the Penn Station submarket are paying prime rates. Average asking rents there were 37.8 percent higher than the Midtown average, and overall vacancy was 3.1 percent lower.
The report also cited how companies relocating to the Penn District are “significantly more likely to expand their footprint rather than consolidate,” bucking current trends toward smaller leases.
Albert credited the larger footprints to the availability of larger blocks of space in the Penn submarket.
“Penn Station offers some of the larger blocks available, especially since Penn 2 was completed,” said Albert, noting that much of this space has been “gobbled up.”
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NEW YORK is Back!
“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.
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