Vornado Realty Trust is on board with the federal government taking over Penn Station’s revamp.
During the firm’s 2025 first-quarter earnings call, CEO Steve Roth pointed to how the neighborhood around the station has changed and welcomed progress on overhauling the station itself.
“Anybody that wants to come in and help us finish the job below ground… We’re in favor of,” he said.
The Trump administration announced last month that Amtrak, with the backing of the Department of Transportation, will lead the redevelopment and possible expansion of the station. Vornado has spent hundreds of millions of dollars redeveloping Penn 1 and Penn 2, and creating public plazas surrounding the buildings. Over the years, executives have referred to the neighborhood, where the real estate investment trust owns millions of square feet, as “Vornadoland” and “the promised land.”
On Tuesday, Vornado executives were coy about the future development within the Penn District. One analyst asked about the potential sale of the Hotel Penn site, where Vornado has long planned an office building. Vornado president and CFO Michael Franco said the company looks “at all opportunities.”
“The focus today is investing in existing business, whether new development or paying down some debt,” Franco said. “We are looking at some external opportunities, and it is hard to put the odds on whether any of those move forward.”
Earlier in the call, another analyst pointed to Deloitte’s agreement to lease 800,000 square feet in Related Companies’ 70 Hudson Yards, asking if a deal of that magnitude would give Vornado confidence to begin construction at the Hotel Penn site, known as Penn 15. Roth said Vornado, along with “all the developers in town,” were shown the Deloitte lease. Vornado, he said, can afford to wait for a better offer.
“The deal that was made was a very aggressive deal for the tenant; the pricing was very tight,” he said. “We’re not bashful to say no to a deal that doesn’t give us the financial results that we think our shareholders are entitled to.”
“We’re getting there,” he added. “I think we’re on the foothills of a landlord’s bull market.”
Roth also called the Penn 15 site the second-best vacant piece of land in town, ranking just below 350 Park Avenue, where the firm is co-developing an office tower anchored by Ken Griffin’s Citadel.
In his annual letter to shareholders in April, Roth hinted that Vornado could pivot to building apartments, saying such construction costs less than office buildings and the market for the former is less volatile.
On Tuesday, he walked that enthusiasm back a bit, acknowledging that the political environment around housing development is complicated in New York City. He would not, however, disclose if the firm plans to use the property tax break 485x, nor if the company would build smaller-scale apartments in the Penn District to avoid construction wage requirements that kick in for larger projects.
Roth simply said Vornado will be “sprinkling in a not insignificant amount of apartments” in the Penn District. He has previously indicated that housing could be built as part of Penn 15. The firm also plans to move forward with a small apartment building at 34th Street and Eighth Avenue.
At the start of the call, Roth mentioned that other office CEOs don’t think the macroenvironment — in other words, the Trump administration’s tariffs — will affect their business. Roth acknowledged that it will affect “our customers, clients and tenants, so of course, this will affect all of us somewhat.” He said he views the objectives of the tariffs to be “symmetry and fairness.”
“Notwithstanding the tactics, reducing government bloat has to be a good thing, and will also reduce the deficit. I am agnostic,” he said. “Whatever the outcome, I believe the best bet is that this global kerfuffle will be resolved, settled and over much more quickly than you think.”
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