On Running to anchor Vornado's Penn 1 with 85K sq ft lease
Vornado Realty Trust has signed Swiss apparel company On to an 85,000-square-foot lease at Penn 1. On will relocate its headquarters from Soho, taking the entire eighth floor and part of the seventh, including an outdoor terrace. The 15-year lease has an asking rent of $120 per square foot.
The 85,000-square-foot agreement marks a significant commitment for Vornado’s Penn 1 tower, which sits within the broader Penn Station redevelopment area. On, a Swiss athletic footwear and apparel brand, will consolidate its New York operations from its current Soho location, taking over the entire eighth floor and a portion of the seventh, which includes access to an outdoor terrace. The 15-year term at an asking rent of $120 per square foot reflects premium pricing for the property, underscoring the landlord’s confidence in the building’s post-redevelopment appeal.
This move highlights a broader trend of established tenants seeking modern, amenity-rich office space near major transit hubs. For Vornado, the lease adds a high-profile international brand to its tenant roster, potentially boosting leasing momentum at Penn 1. For On, the relocation signals a strategic shift toward a larger, more flexible footprint as the company continues to expand its U.S. presence.
This lease could signal renewed confidence in Manhattan’s office market, particularly around transit-oriented districts like Penn Station. Employees of On may benefit from improved commuting access and workplace amenities, while local businesses near Penn 1 could see increased foot traffic. However, the high asking rent may also reflect broader pressures on commercial real estate pricing, potentially affecting smaller tenants or contributing to uneven recovery across different building classes. The relocation from Soho could shift economic activity between neighborhoods, though the net societal impact remains uncertain.