The bell is ringing, announcing the return of a landlord’s
market. Midtown vacancy rates are now single digit.(2) A
handful of new-builds are finishing up and there is no new
supply on the short-term horizon. Replacement cost is the
big story in New York. For a theoretical new tower in midtown
(an oxymoron, since it’s almost impossible to find a
site in midtown), replacement cost would be well over
$800 per square foot,(3) which would translate to a triple
digit full service rent.
For David Greenbaum who oversees Vornado’s New York
office business (where each asset is worth between $100
million to over $1 billion), leasing, management, staffing,
lobby upgrades, etc. are day-to-day fare. He also has ultimate
oversight and P & L responsibility for BMS, our
1,300 person strong cleaning and security company;
PowerSpace, our shared office business; etc.
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David also oversees the two prominent condo conversion projects
acquired this year at 220 Central Park South and 40 East
66th Street.
David, together with myself, leads our effort to develop the
Farley Post Office Building,(4) which occupies the double
super block between 31st and 33rd Streets from 8th to 9th
Avenues, into the Moynihan Train Station. We aspire to
expand this project to incorporate the adjacent super
block (currently Penn Station, our Two Penn Plaza and
Madison Square Garden) into a 7.0 million square foot
mixed-use development—5.5 million square feet of newbuilds
plus our existing 1.5 million square foot Two Penn
Plaza. Vornado assets surround this project—One Penn
Plaza, Two Penn Plaza, 11 Penn Plaza and Hotel Penn.
Whatever happens, our 6 million square feet here will
benefit enormously.
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