NYU Finalizes 1.08M-sf Deal at 770 Broadway
The “handshake” deal initially announced in August 2024 of a long-term master lease with an unidentified user at 770 Broadway has been finalized. New York University (NYU) was subsequently identified as the pending master lessee a few months later; and now, according to a press release by landlord Vornado Realty Trust, the execution of the master lease has been completed. Under the terms of the transaction, NYU will lease 1.076 million square feet “on an ‘as-is,’ triple net basis for a 70-year lease term.” As part of the deal, NYU made a $935 million prepaid lease payment and will also make annual lease payments of approximately $9.3 million during the lease term. NYU has an option to purchase the leased premises in 2055 and at the end of the lease term in 2095; and will assume the existing leases and related tenant income at the property. An existing $700 million mortgage was repaid by the REIT, using a portion of the prepaid lease payment. The roughly 92,000-square-foot retail condominium spanning the ground, cellar levels and mezzanine will be retained by Vornado, and is currently occupied by Wegmans Food Market under a 30-year lease secured in 2021. The move by Vornado to pursue a master lease option came at a time when several major technology tenants announced downsizing plans, including Facebook parent company Meta. Facebook had become the building’s anchor tenant, initially relocating to the building in 2013 following a lease for 98,570 square feet; and following several expansions over the subsequent 9-years occupied over 880,000 square feet. However, in 2024, decisions by Meta to not renew a lease for 275,000 square feet that was expiring downsized the company’s footprint to about 500,000 square feet, pushing vacancy at the building higher.