Vornado Realty Trust to Purchase 623 Fifth Avenue

Rhea-AI Summary

Vornado Realty Trust (NYSE:VNO) has announced plans to acquire the 623 Fifth Avenue office condominium for $218 million. The 36-story building, spanning 382,500 rentable square feet, is situated above the flagship Saks Fifth Avenue department store.

The property, currently 75% vacant, will undergo a complete repositioning and redevelopment to become a premier Class A boutique office building. The acquisition is expected to close in September 2025, with redevelopment completion and tenant delivery scheduled for 2027. The building will complement Vornado's existing Plaza District and Park Avenue portfolio, which includes several prestigious properties.

Positive

• Strategic acquisition in prime Manhattan location with protected views of Midtown
• Opportunity to transform 75% vacant property into Class A boutique office space
• Complementary addition to existing premium Manhattan portfolio
• Relatively quick development timeline with delivery by 2027

Negative

• Significant capital investment required for complete repositioning and redevelopment
• 75% vacancy rate in current building state
• Exposure to interest rate fluctuations and inflation risks
• No immediate revenue generation due to redevelopment period

Insights

Commercial Real Estate Investment Analyst

Vornado's $218M acquisition of mostly-vacant Fifth Avenue property represents strategic expansion in Manhattan's premium office market despite challenging office environment.

Vornado's agreement to purchase the 623 Fifth Avenue office condominium for $218 million represents a strategic expansion of its premium Manhattan portfolio. The 36-story, 382,500 square foot property sits in a prime location above the flagship Saks Fifth Avenue department store, offering exceptional views of Midtown landmarks like Rockefeller Center and St. Patrick's Cathedral.

The 75% vacancy rate of the building presents both a challenge and opportunity. Vornado isn't simply acquiring an income-producing asset but is betting on its ability to transform the property through comprehensive redevelopment into a "premier, best-in-class, Class A boutique office building" by 2027.

This acquisition perfectly complements Vornado's existing Plaza District and Park Avenue holdings, which include prestigious properties like 280 Park Avenue, 350 Park Avenue, and 1290 Avenue of the Americas. The purchase reflects Vornado's confidence in the long-term value of prime Manhattan office space despite current market uncertainties.

The $570 per square foot acquisition price appears relatively conservative for prime Fifth Avenue real estate, though substantial additional capital will be required for the complete repositioning. The redevelopment timeline (closing in September 2025 with completion in 2027) suggests Vornado anticipates a strengthening in the premium office market segment by the time the transformed property becomes available for leasing.

Vornado Realty Trust

623 Fifth Avenue

NEW YORK, Aug. 25, 2025 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE:VNO) announced today that it has entered into an agreement to purchase the 623 Fifth Avenue office condominium, a 36-story, 382,500 rentable square foot building situated above the flagship Saks Fifth Avenue department store, for $218 million. The building’s location provides for excellent light and air and sweeping, protected views of Midtown including Rockefeller Center and St. Patrick’s Cathedral.

The building is currently 75% vacant and Vornado intends to completely reposition and redevelop it into a premier, best-in-class, Class A boutique office building. The fully transformed 623 Fifth Avenue building will complement Vornado’s nearby Plaza District and Park Avenue holdings of 280 Park Avenue, 350 Park Avenue, 595 Madison Avenue, 640 Fifth Avenue, 689 Fifth Avenue and 1290 Avenue of the Americas.

Vornado expects to close the acquisition in September 2025 and complete the redevelopment for delivery to tenants in 2027.

Vornado Realty Trust is a fully-integrated equity real estate investment trust.

C O N T A C T

Thomas J. Sanelli
(212) 894-7000

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024. Currently, some of the factors are interest rate fluctuations and the effects of inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/348c405b-31ea-4fbb-b0c1-f11fa056e59d

FAQ

How much is Vornado Realty Trust (VNO) paying for 623 Fifth Avenue?

Vornado Realty Trust is purchasing 623 Fifth Avenue for $218 million.

What is the current occupancy rate of 623 Fifth Avenue?

The building is currently 75% vacant, with Vornado planning to completely reposition and redevelop the property.

When will Vornado complete the redevelopment of 623 Fifth Avenue?

Vornado expects to complete the redevelopment and deliver the building to tenants in 2027.

How large is the 623 Fifth Avenue property being acquired by VNO?

The property is a 36-story building with 382,500 rentable square feet situated above the Saks Fifth Avenue department store.

What other properties does Vornado own near 623 Fifth Avenue?

Vornado owns several nearby properties including 280 Park Avenue, 350 Park Avenue, 595 Madison Avenue, 640 Fifth Avenue, 689 Fifth Avenue and 1290 Avenue of the Americas.