Penn Station & Garment District Office Space

Here is the thing nobody tells you about this submarket: it is really two markets wearing one name. On top of Penn Station, Vornado spent the better part of a decade and roughly $750 million turning a tired tower into PENN 2, and the rents up there now start around $109/SF (Vornado, Q4 2025 earnings, February 2026). Walk ten minutes north into the Garment District and you are touring 1923 fashion lofts where a 1,300 SF suite can ask $37/SF. Same submarket. Same subway lines. Wildly different worlds. So when somebody quotes you “the Penn Station rent,” ask them which half they mean.

Quick read on the wider market in Q1 2026: it was the strongest first quarter Manhattan has had since 2014. Tenants signed 11.78 million SF, availability tightened to 13.7%, and asking rents rose 2% to $77.55/SF (Colliers, Q1 2026 Manhattan Office Market Report, April 8, 2026). The Penn District is riding that wave hard. The Garment District is quieter, and that is exactly where the deals still are.

Penn Station / Garment District Office Market Overview

Five years ago, almost nobody put “Penn Station” and “trophy office” in the same sentence. The area was transit-rich and tired. Then Vornado bet the house on it, and the bet paid off. PENN 2, the 31-story, roughly 1.6 million SF tower sitting directly on top of the station, came out of a $750 million renovation with a new glass curtain wall, a triple-height lobby, 73,000 SF of outdoor space, and a brand-new Seventh Avenue entrance to Penn Station that Vornado calls the Bustle (Vornado Realty Trust, Q4 2025 earnings, February 2026). The space leased fast.

The numbers tell it plainly. Vornado leased 908,000 SF at PENN 2 in 2025 at an average starting rent of about $109/SF, with the tower floors closer to $114/SF, on leases averaging more than 17 years. The building went from 60% leased in mid-2025 to roughly 80% by the company’s Q4 2025 earnings call, with only about 348,000 SF left (Vornado, February 2026).  

Across the street, the Garment District is playing a different game. Steve Madden signed a 13-year lease for 60,000 SF at Empire State Realty Trust’s 501 Seventh Avenue in 2026, moving its headquarters in from Long Island City at an asking rent in the low $60s/SF (Commercial Observer, April 30, 2026). A year earlier, Carolina Herrera renewed and expanded to 34,000 SF in the same building (Empire State Realty Trust, April 17, 2025).  

Four Forces to Monitor

• The Penn District is now a trophy address, full stop. PENN 2 leased 908,000 SF in 2025 at about $109/SF average starting rent and sits near 80% occupancy (Vornado, Q4 2025 earnings, February 2026). Verizon moved its global headquarters here. If your mental picture of “above Penn Station” is still a discount, update it. That window has closed.
• Fashion is re-committing, not retreating. Steve Madden took 60,000 SF and Carolina Herrera expanded to 34,000 SF, both at 501 Seventh Avenue (Commercial Observer, 2026; Empire State Realty Trust, 2025). The Garment District’s apparel base is smaller than it was 30 years ago, but the brands that remain are signing long leases in modernized buildings. The “fashion is leaving” narrative is a decade out of date.
• The older stock is still working through, so deals still exist. Even as PENN 2 filled up, the broader Penn Station submarket carried a vacancy rate around 19% in late 2025 (The Real Deal, October 27, 2025), reflecting older towers and loft space still being absorbed. Translation: the trophy tier is tight, but the side streets and value loft stock still have room to negotiate.
• Transit is the entire thesis here. You are sitting on top of the busiest passenger transportation hub in the Western Hemisphere, with the renovated Moynihan Train Hall next door and Hudson Yards a short walk west. With companies pushing return-to-office, a building this connected is a recruiting tool. Run the math for your team on our Commute Calculator and the case usually makes itself.

How Much Does Penn Station / Garment District Office Space Cost?

Honest answer: pick your half. The Penn District trophy tier (PENN 1 and PENN 2) now prices like Class A Midtown, with PENN 2 floors leasing in the $109 to $125/SF range (Vornado, Q4 2025 earnings, February 2026; recent deal asks of $115 to $125/SF per The Real Deal and Commercial Observer, 2025 to 2026). The Garment District loft stock is a different animal: renovated Class A and B space generally runs $45 to $70/SF, and value loft on the side streets drops to $35 to $50/SF (Metro Manhattan internal research, June 2026). Midtown’s overall average was $78.23/SF in Q1 2026 (Cushman & Wakefield, April 2026), so the Garment District is one of the few places you can land well under the district average and still walk to Penn Station.

Before you tour anything, get your size right. A fashion showroom, a 12-person startup, and a corporate HQ all shop this submarket, and they shop completely different buildings. Run your headcount through our Office Space Calculator first so you are touring the right tier instead of the whole zip code.

Penn District Trophy Space

This is the part of the submarket that changed. PENN 2 is the headliner: roughly 1.6 million SF, 31 stories, $750 million renovation, sitting directly on the station (Vornado, February 2026). The tenant roster reads like a Class A building because it is one. Verizon relocated its headquarters here, taking about 203,000 SF on a 19-year lease with exclusive access to more than 25,000 SF of outdoor space (Commercial Observer and CoStar, 2025). Consulting giant Capgemini signed for 43,000 SF at an asking rent of $120/SF (Commercial Observer, 2025 to 2026). Communications firm FGS Global took 80,000 SF at $115/SF. Fintech firm Current took 62,000 SF at $125/SF, moving in from Chelsea. Add Dick’s Sporting Goods, Madison Square Garden, Major League Soccer, and Universal Music Group, and you have one of the more eclectic blue-chip tenant lists in Midtown.

If you genuinely need this kind of space, walk in knowing the leverage has shifted. These buildings are leasing well, transit is the selling point, and the landlord knows it. Lead with your credit and your term. For a deeper look at what actually separates a trophy building from ordinary Class A, see our piece on how trophy buildings set themselves apart in NYC.

Penn Plaza Class A Space

Not every Penn Station address is a brand-new trophy. The established Penn Plaza towers, One Penn Plaza at 230 West 34th Street, Five Penn Plaza, and 14 Penn Plaza at 225 West 34th Street, give you genuine Class A bones and the same transit access without the trophy price tag. These are large, efficient buildings that have housed names like Cisco and Citigroup. Pricing here generally runs in the mid-$60s to low-$80s/SF (Metro Manhattan internal research, June 2026), which is the sweet spot for a tenant who wants a real Penn Station address but does not need the newest lobby in the neighborhood.

Garment District Loft Space

Now the other half. The Garment District is loft country: honest prewar Class B and C space, high ceilings, big windows, floor plates that divide well for smaller tenants. Some of the most flexible commercial loft space in Midtown, and fashion’s home turf for a century. The anchor buildings sit on the Broadway and Seventh Avenue spine: 1407 Broadway, 530 Seventh Avenue, and the Empire State Realty Trust portfolio at 501 Seventh Avenue, 1400 Broadway, and 1333 Broadway. ESRT has been modernizing these aggressively, adding rooftop lounges, town-hall conference space, and ground-floor retail, then re-signing fashion tenants into them.

On pricing, renovated Class A and Class B loft on the spine generally runs $50 to $70/SF, and Steve Madden’s low-$60s/SF asking at 501 Seventh confirms that band for a quality building (Commercial Observer, 2026). Head to the side streets between 35th and 39th and the Class B and C loft stock can drop into the $35 to $55/SF range (Metro Manhattan internal research, June 2026). One current example: a 1,300 SF suite at 221 West 37th Street with eleven-foot ceilings asking $37/SF. If you are price-sensitive and you do not need a marble lobby to land your next client, this is one of the best values in all of Midtown. Quick refresher on the building-class system here.

Lease Concessions and Effective Rent

Here is where most tenants leave money on the table. They grind on the asking rent, win a couple of dollars, and sign, while the real value is in free rent and the tenant improvement allowance. In the Penn District trophy tier, note that the big PENN 2 deals carried sizable free-rent packages baked in, which is part of why Vornado’s near-term cash flow dipped even as leasing boomed (Vornado, Q4 2025 earnings, February 2026). In the Garment District, concessions are even more tenant-friendly. The ranges below are typical-market figures from our recent deals (Metro Manhattan internal research, June 2026), assuming a 5 or 10-year term. Your actual numbers come down to credit, term, building, and how hard you push.

Two things worth reading before you sign anything in this submarket. First, the term length actually changes your whole package, so our breakdown of 3-year, 5-year, or 10-year lease terms is worth ten minutes. Second, the math on free rent and TI is where good deals become great ones, and our concessions explainer walks through it.

Which Part of the Submarket Is Right for Your Business?

Tenants here sort themselves cleanly by industry and budget, and the dividing line is usually 34th Street and a price point. Fashion, media, and small business cluster in the Garment District loft stock. Corporate HQs, finance, and consulting head for the Penn District trophy towers. Match your industry and your size to the right zone and most of the search narrows itself. The table is the cheat sheet.

One more note for the small-business and startup crowd: the Garment District is one of the best landing spots in the city for a first real office, and it pairs naturally with flexible options nearby. If you are weighing a private space against a shared one, our guide to the top NYC neighborhoods for small businesses and our overview of coworking space are good starting points.

Top Office Buildings and Amenities

If your last tour here was pre-2020, the picture in your head is wrong, especially on the Penn side. The amenity bar in this submarket jumped, and it jumped at both ends. Three tiers to expect:

Penn District trophy tier (PENN 1, PENN 2): New curtain walls, triple-height lobbies, tenant amenity floors, conferencing, fitness, and serious outdoor space. PENN 2 alone has more than 73,000 SF of landscaped outdoor area, including a 17,000 SF roof, plus a 280-person town hall. Direct access to Penn Station and the Moynihan Train Hall. This is trophy-grade product on top of the busiest transit hub in the hemisphere.

Garment District modernized spine (501 Seventh Ave, 1400 Broadway, 1333 Broadway, 1407 Broadway): Renovated lobbies, rooftop lounges, shared town-hall conference space, and prebuilt suites. Empire State Realty Trust has built a connected campus across its Garment District buildings, with shared amenities and ground-floor retail. Real upgrades on a loft budget.

Garment District value loft (side streets, W 35th to 39th): Prewar character, high ceilings, big windows, freight access, and tenant-controlled HVAC. Light on frills, heavy on flexibility, and increasingly stocked with move-in-ready spec suites.

Featured Buildings

• PENN 2 (2 Pennsylvania Plaza): Vornado’s redeveloped trophy above Penn Station. Roughly 1.6 million SF, $750 million renovation, about 80% leased as of February 2026. Tenants include Verizon, Capgemini, FGS Global, Current, Madison Square Garden, Major League Soccer, and Universal Music Group (Vornado, 2026).
• PENN 1: Vornado’s other Penn District tower, fully reclad with 8,500 new triple-pane windows and a major energy-efficiency overhaul, anchoring the southern end of the district.
• One Penn Plaza (230 West 34th Street): A large, established Class A tower with direct Penn Station access and a long roster of corporate tenants.
• 501 Seventh Avenue: Empire State Realty Trust’s modernized 1923 Garment District building. Recent home to Steve Madden’s 60,000 SF headquarters lease and Carolina Herrera’s 34,000 SF expansion (Commercial Observer, 2026; ESRT, 2025).
• 1407 Broadway: A Garment District mainstay with a distinctive zigzag facade, long associated with fashion and media tenants.
• 5 Penn Plaza and 14 Penn Plaza: Class A Penn Plaza towers offering transit-adjacent space below trophy pricing.
• 110 West 34th Street and 41-45 West 34th Street (the Monolith Building): Class B options near Herald Square and the Empire State Building.
• 330 West 42nd Street (Deco Tower): A landmark mixed-use Class A building on the northern edge of the submarket.

For a wider look at the best buildings in the borough, see our list of the top 10 Class A office buildings in Midtown. Or browse all buildings and filter active listings by size and price.

Major Office Landlords

Two names own the story here, and they could not be more different. Vornado Realty Trust is the Penn District. It controls PENN 1, PENN 2, and the surrounding redevelopment, and it is playing for trophy rents and long corporate leases. Empire State Realty Trust is the Garment District spine, with a modernized campus of Broadway and Seventh Avenue buildings aimed at fashion, media, and smaller tenants. The rest of the loft stock is fragmented among private and family owners, which is good news if you like to negotiate. Background reading: the biggest commercial real estate landlords in NYC.

Transportation and Commuting

This is the submarket’s superpower, so lead with it when you are selling the office to your team. You are on top of Penn Station, the busiest passenger rail hub in the Western Hemisphere, with the renovated Moynihan Train Hall next door. That means Amtrak, the Long Island Rail Road, and NJ Transit all under your feet, plus a dense web of subway lines and the Port Authority Bus Terminal a few blocks north. Hudson Yards and the 7 train sit just to the west. If anyone on your team is resisting the commute, send them our Commute Calculator with their home address.