Soon, New York’s Penn Station could undergo a major transformation. For years, this area has been less-than-desirable. While a large portion of Manhattan has thrived, around Pennsylvania Station commuters have made this a gritty part of the city. However, to change look and feel, Vornado Realty Trust has a plan.
As one of the largest office landlords in the country, Vornado wants to revitalize the area by investing literally millions of dollars in various infrastructures to include public plazas, new retail space, and more.
As reported by the New York Business Journal, the plan is to make Penn Station and surrounding area more alluring and to make office space inviting. Currently, office buildings in the area have a reputation for being second-rate, which in turn means that rent is second-tier. If Vornado’s plan works, property value could jump substantially.
To date, Vornado owns roughly nine million square feet in the Penn Station area, which includes 1 Penn Plaza, a 57-story building. However, the company’s overall portfolio is estimated to be worth approximately $5.5 billion.
As stated by Steven Roth, chief executive of Vornado, there is no reason that substantial rising rents in Penn Plaza cannot be achieved. All the area needs is some TLC. In his statement last month, Roth said the primary focus over the next few years will be to achieve that goal.
Moving toward Growth
The plans that Vornado set forth clearly illustrate a new chapter for the company. Over the past three years, the company has experienced some slimming down by eliminating extraneous businesses. As part of this were strip malls in an effort to satisfy investor demands for more simplicity.
However, as the company moves forward with focus being on retail and offices not only in New York but also Washington DC, it seems as if attention is shifting toward growth. Even though it seems as if Penn Station will be one of the company’s major projects, some people wonder if the plug will be pulled.
After all, Roth, who is now 73-years old, has a history of indecisiveness. Throughout the years, he has often taken a lot of time when making big moves and in some instances, put plans on hold for years. A perfect example is the rehabilitation of the Hotel Pennsylvania. For more than 10 years, Roth has promised the 1,700 room hotel would be completely demolished or replaced with an office tower although neither has happened.
Prior to the Hotel Pennsylvania, the former Alexander’s department store sat vacant for a long time before Roth finally created a plan. Eventually, a 55-story home of Bloomberg LP complete with top floor condos was built, which proved to be extremely lucrative.
While Roth has been slow to make many decisions, some analysts believe he is highly motivated and dedicated to the overall of Penn Station but also Vornado before he finally retires. While not imminent, this new plan seems to support that retirement is not too far off in the future.