- Swiss apparel and sneaker company On signed an 85,000-square-foot headquarters lease at Vornado Realty Trust’s Penn 1, relocating from 165 Mercer Street in Soho.
- The 15-year deal covers the entire 61,000-square-foot eighth floor plus 24,000 square feet on the seventh floor with a terrace, at a $120-per-square-foot asking rent.
- Back-to-back deals at the renovated tower show amenity-rich, transit-adjacent Manhattan office space continues to pull tenants from older submarkets.
Swiss sneaker and apparel company On signed an 85,000-square-foot headquarters lease at Vornado Realty Trust’s Penn 1, according to The Real Deal, citing Commercial Observer. The deal adds to a string of recent Penn District leases for Vornado CEO Steve Roth.
On, formerly known as On Running, will relocate its New York headquarters from Spear Street Capital’s 165 Mercer Street in Soho.
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From Startup to Global Brand
Ironman champion Olivier Bernhard founded On in 2010. Tennis star Roger Federer became a shareholder in 2019.
The company then went public on the New York Stock Exchange in 2021. Its IPO raised $746 million.
Since then, the brand has grown quickly. On topped $1 billion in global sales in the second quarter of 2026.
The company also recorded $676 million in gross profit. More recently, it named soccer star Kylian Mbappé as its global ambassador.
The Details
On will take the entire 61,000-square-foot eighth floor at Penn 1. It will also lease 24,000 square feet on the seventh floor, including an outdoor terrace.
The lease runs for 15 years. The asking rent is $120 per square foot.
CBRE’s Sinclair Li, Patrick Moroney, and Liz Lash represented On. Meanwhile, Jared Silverman and Josh Glick handled the deal in-house for Vornado.
Beyond its office, On operates three stores in New York City. The company is also negotiating for a fourth location at the General Motors Building on Fifth Avenue.
Penn District Leasing Builds Momentum
The On deal follows another Penn 1 commitment earlier in September. Human resources tech firm Gusto doubled its footprint at the tower.
Gusto signed a 13-year lease for 38,000 square feet on the 47th floor. It also renewed its existing 38,000 square feet on the 52nd floor for five years.
The asking rent for the deal is $135 per square foot.
At 2.5 million square feet, Penn 1 is the largest office building in Vornado’s Penn District. Its tenant roster includes Samsung, Dell, Empire Health, Hartford Insurance, Jacobs Engineering, Morgan Stanley, and Wells Fargo.
Why It Matters
Vornado’s roughly $450 million renovation of Penn 1 appears to be gaining traction. The overhaul added new plazas, a curtain wall, elevators, and lobbies.
The project also added LEED certification and carbon-cutting upgrades. In addition, Vornado added 160,000 square feet of food and recreation amenities at the base.
The deal also shows a consumer brand choosing a repositioned Midtown tower over a Soho loft for its headquarters. Furthermore, deals like Snapchat’s PENN 2 lease strengthen Vornado’s case for the Penn District.
Together, the deals show that the area around Penn Station can compete for top tenants.
What’s Next
Vornado will look to keep signing Penn 1 leases at asking rents between $120 and $135 per square foot. Strong leasing at those rates would support the economics of its repositioning bet.
Meanwhile, On’s pending negotiations for a Fifth Avenue store at the General Motors Building could expand its Manhattan real estate footprint. That would give the brand another location beyond its new headquarters.
