Steve Roth, CEO of Vornado Realty Trust, declared during a recent earnings call that the trend of remote work is reversing, with many employees returning to high-quality office spaces. Manhattan's office market shows significant demand, especially for Class-A properties, despite a challenging environment for new developments due to high interest rates and increased construction costs. Roth also highlighted the need for older building renovations to remain competitive and discussed the uncertain future of the Hotel Penn site amidst financial hurdles for development.
Roth expressed skepticism about remote work's permanence, noting that many workers are returning to offices, particularly in high-quality Manhattan spaces.
The office market in Manhattan is skewed heavily toward high-end properties, as landlords of older buildings may need renovations to attract tenants.
Demand for Class-A office space is rebounding, yet developers face challenges such as high interest rates and increased construction costs prompted by tariffs.
Roth discussed the challenges of the Penn District project, mentioning financial hurdles that may delay developments despite potential options being considered.
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