Vornado Realty Trust disclosed second-quarter results Monday showing continued strength in its core Manhattan office and retail portfolio, alongside a $1.1 billion move deeper into Park Avenue: a 49% stake in Park Avenue Plaza, one of Midtown’s marquee office towers. The results, filed with the U.S. Securities and Exchange Commission, add fresh company-level evidence for a Manhattan office market that Colliers data showed jumping 28% in July.
Vornado (NYSE: VNO) reported adjusted funds from operations of $0.67 per diluted share for the quarter, up from $0.56 a year earlier. GAAP net income fell sharply to $0.08 per diluted share from $3.70 in the second quarter of 2025, a swing the company attributed to the absence of an $803 million gain booked a year ago on the 770 Broadway master lease with New York University — a one-time item, not a sign of deteriorating operations.
On June 11, Vornado acquired a 49% interest in Park Avenue Plaza at a gross valuation of $1.1 billion, or roughly $950 per square foot, according to the company’s second-quarter earnings release filed with the SEC. The 45-story, 1.2 million-square-foot tower occupies the full block between East 52nd and 53rd streets and carries protected Park Avenue views. Fisher Brothers retains the remaining 51% stake and continues to manage day-to-day operations at the property.
The underlying portfolio metrics point to a tightening Manhattan office and retail market for Vornado specifically. At Vornado’s ownership share as of June 30, its New York office portfolio was 90.8% occupied and its New York retail was 92.2% occupied; combined New York occupancy, including space held for redevelopment, stood at 77.8%. Over the first six months of 2026, the company leased 550,000 square feet of New York office space at an initial rent of $105.14 per square foot on leases averaging 8.3 years, with straight-line rents up 9.5% over the rents they replaced and cash-basis rents up 7.1%. Same-store net operating income in the New York segment rose 10.5% year over year on a GAAP basis and 4.7% on a cash basis.
Vornado is also pushing new office supply into a market with historically little of it. The company’s 623 Fifth Avenue office condominium project, 383,000 square feet, is projected to generate a 10.1% incremental cash yield once it stabilizes in 2028. Nearby, Vornado paid $141 million for 3 East 54th Street, a site zoned for 232,500 buildable square feet, where demolition is now underway — a project that could eventually add to the pipeline of new towers alongside BXP’s 343 Madison Avenue tower near Grand Central, which broke ground on $1.2 billion of construction financing last month.
Elsewhere in the portfolio, Vornado booked a $32 million gain on debt extinguishment from the sale of its 50% joint-venture interest in 606 Broadway, and recorded its 32.4% share of a $44.3 million net gain from the May 2026 sale of Alexander’s Rego Park property. On the financing side, the company issued $500 million of 5.75% senior unsecured notes due 2033 and refinanced One Park Avenue with a new $525 million loan priced at SOFR plus 1.78%, part of a broader round of refinancings that also touched 7 West 34th Street and 61 Ninth Avenue.
The quarter follows Vornado’s disclosure last week that Snap Inc. subleased nearly 200,000 square feet from Verizon at the company’s Penn 2 tower, another sign of demand returning to large blocks of Manhattan office space that struggled to lease during the pandemic-era downturn.
What it means: Vornado’s own numbers — rising same-store NOI, positive mark-to-market on new leases, and a willingness to spend nine figures on more Park Avenue exposure — are company-specific data points, not proof of a citywide trend on their own. But layered onto Colliers’ broader Manhattan leasing figures and BXP’s new construction financing, they add to a picture of the city’s best office submarkets, particularly Park Avenue and Midtown South, outperforming the national office sector.
What to watch: Whether Vornado’s leasing pace and rent growth hold up through the back half of 2026, and how the Park Avenue Plaza partnership with Fisher Brothers evolves as the building comes up for lease renewals.
