- Vornado to break ground in 2026 on three NYC projects: major office tower, apartment building, and Saks Fifth Avenue office revamp.
- $6B Park Avenue office project moves forward with Citadel CEO Ken Griffin, targeting the highest NYC rents.
- Office leasing strong in 2025, with Vornado’s NYC portfolio occupancy rising to 91.2% and rent growth of 8% on renewals.
- Asset sales and refinancing expected to fund the development surge and stock buybacks.
Expansion Plans Accelerate
NYC development is taking center stage for Vornado Realty Trust. The company plans to begin construction on three major projects in 2026, according to Bisnow.
Vornado will move forward with a $6B Park Avenue office tower alongside Citadel CEO Ken Griffin. It will also start a 475-unit apartment building near Penn Station. In addition, the firm will redevelop the office floors above the Saks Fifth Avenue flagship. The expansion follows a strong year of office leasing across Vornado’s New York portfolio.
Landmark Office and Residential Projects
The 1.8M SF Park Avenue office project will feature Citadel as a major tenant, with commitments likely to grow. Vornado and Rudin, as joint venture partners, retain an option to increase their stake or sell a minority position to Griffin for $1.2B. Demolition for the new tower is set for April, while construction funding obligations will be deferred for several years. Meanwhile, the planned $350M apartment building at 484 Eighth Ave. will provide 475 units and leverage the 485-x tax abatement, with a fall 2026 groundbreaking.
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Saks Redevelopment Strategy
Vornado is repurposing 623 Fifth Ave., recently acquired for $218M, converting upper floors into a fully modernized office asset rather than luxury condos. With $230M earmarked for upgrades, the building is expected to generate a 10% return and help address limited new space availability in Midtown’s top submarkets. The developer is also evaluating future opportunities after its recent $141M acquisition of 3 E. 54th St., which will be demolished for new development potential.
Why It Matters for NYC Development
Strong leasing activity fueled Vornado’s return to development, driving NYC portfolio occupancy up to 91.2% at the end of 2025. Average starting rents reached $95.36 PSF, increasing nearly 8% on renewals. That momentum also includes a major tenant expanding its footprint at Penn 11, underscoring sustained demand in the Penn District. While tenant incentives have delayed some income streams, over $200M in lease commitments will begin generating rents post-2027. Vornado plans to fund ongoing NYC development and continued stock buybacks through a mix of asset sales, refinancing, and leveraging debt-free assets around Penn Station, according to CEO Steve Roth.
