- Snap Inc. signed a 198,893-square-foot sublease at Vornado Realty Trust’s PENN 2 office tower near Penn Station, ranking among Manhattan’s largest July deals.
- The transaction follows major commitments from AI, finance, and corporate tenants as PENN 2’s redevelopment pushes occupancy to about 90%.
- Manhattan office leasing is tracking toward its strongest annual performance since 2000, signaling improving demand for upgraded properties.
Snap Inc. has expanded its Manhattan footprint with a 198,893-square-foot sublease at Vornado Realty Trust’s PENN 2, adding another major commitment to the Midtown South office recovery, as documented by GlobeSt. The Snapchat PENN 2 lease was one of the largest Manhattan office transactions in July.
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A major tenant returns to Midtown South
The deal ranked as the fourth-largest Manhattan lease. Anthropic led the month with a 465,630-square-foot lease in Midtown South, followed by NBCUniversal Media’s 244,185-square-foot lease at 1221 Avenue of the Americas and Aon’s 202,002-square-foot deal at 1 Liberty Plaza.
Manhattan office leasing totaled 3.87 million square feet in July, up 28.4% year-over-year. Midtown South asking rents averaged $79.13 per square foot during the month, representing a 1.7% increase from July 2025.
PENN 2’s redevelopment drives leasing
Vornado repositioned PENN 2 with a major renovation that included a new curtain wall, a 430-foot blockfront, corner loggias, and a triple-height lobby. The upgrades have helped attract a mix of technology, finance, and corporate users seeking modern office space near transit.
Before Snap’s lease, PENN 2 had already secured several large commitments. Altana AI and Veeva leased a combined 125,000 square feet in June, while Robinhood, Dick’s Sporting Goods, and FGS Global signed leases totaling more than 331,000 square feet in October, according to CBRE.
Manhattan’s office recovery gains traction
The Snapchat PENN 2 lease adds to a broader trend of tenants prioritizing recently renovated, high-quality office buildings in well-connected locations. Vornado’s second-quarter 2026 earnings release reported that its New York office portfolio had 92.2% average occupancy as of June.
Manhattan leasing activity is on pace for its strongest annual performance since 2000. The rebound reflects a widening gap between upgraded buildings that can attract tenants and older assets facing greater pressure from changing workplace requirements.
Why it matters
Large office commitments from technology companies and other major employers are providing evidence that demand is returning for premium Manhattan properties. For landlords, the activity reinforces the value of capital investment in assets that offer modern amenities, efficient layouts, and access to major transportation hubs.
For investors and developers, the shift highlights a flight-to-quality dynamic that continues to shape office markets nationwide. Properties capable of meeting tenant expectations are capturing a larger share of leasing activity even as the broader office sector remains uneven.
What’s next
PENN 2’s leasing momentum will be closely watched as Vornado continues to market its Manhattan office portfolio. With occupancy already near stabilized levels and additional demand expected from companies seeking upgraded space, the property could serve as a benchmark for the recovery of repositioned office assets.
More broadly, CRE professionals will be watching whether Manhattan’s 2026 leasing pace translates into sustained demand beyond a limited group of top-tier buildings.
