Universal Music Group NV is close to striking a deal to occupy space at an office tower in the Penn District of Manhattan.
The Dutch-based firm is negotiating a lease with property owner Vornado Realty Trust to take 300,000 square feet at PENN 2, according to a report from Bloomberg.
The move comes weeks after Steven Roth, CEO of Vornado, signaled in the company's fourth quarter earnings call that the REIT was just "weeks" away from signing a 300,000 square foot lease at the property that sits above Penn Station.
Recently, the 1.62 million square foot building finished its redevelopment, which includes adding a new curtain wall, implementing a 430-foot long blockfront, and placing corner loggias on each floor, which totals 31 stories. Vornado operates 2.52 million square foot office asset, PENN 1, also in the Penn District.
"It is the best redevelopment anyone has ever seen," Roth told analysts on the conference call, adding that "together with PENN 1 has by far the biggest and best amenity package anywhere."
He predicts that the two PENN properties will be 80 percent leased by the end of 2025. In total in Manhattan, Vornado operates nearly 20 million square feet of office assets.
As office recovers from the pandemic lows, New York City has been one of the brightest markets for the asset class in the ongoing recovery. While a recent report from Colliers revealed that leasing volume plunged 12.5% month-over-month in February, the category is still up 38.3 percent year-over-year and 18.6 percent from the 10-year monthly average. Net absorption remained positive for eight straight months, at 900,000 square feet in February.