Madison Square Garden Entertainment has signed a new 20-year lease for 428,000 square feet at Vornado Realty Trust’s PENN 2, which will remain MSG Entertainment’s corporate headquarters.

PENN 2 is in the midst of a full redevelopment as part of Vornado’s multibillion-dollar transformation of the PENN District. The redevelopment of the 1.8 million square foot PENN 2, which features a 430-foot frontage along Seventh Avenue, is slated for completion in the second half of 2023. 

The new PENN 2 will also have creative space and more than 65,000 feet of outdoor space. PENN 2 occupies one of the few double-wide blocks in New York City, directly on top of Penn Station, between Seventh and Eighth Avenues and 31st and 33rd Streets.

“MSG’s commitment to PENN 2 continues the momentum we are generating in the PENN DISTRICT, where we are creating a one of a kind, next generation work environment at the heart of New York City’s thriving West Side,” CEO Steven Roth said in prepared remarks. 

Demand is high for a presence in the PENN District, Roth noted during the REIT’s second quarter earnings call, when he said the company is raising its asking rents at the PENN District, even though it’s still under construction. “The market is understanding our ambitious plans to make the PENN District, the crown jewel of the west side of the new New York,” Roth said.