New York University has signed a lease to master-lease over 1 million square feet of office space at 770 Broadway, transitioning into the building in two phases.
According to data compiled by CoStar, the deal at the property in NoHo, Manhattan, marks the city's largest office deal since the beginning of the pandemic.
Landlord Vornado Realty Trust said that the lease will carry a 70-year term on a triple net basis, with NYU set to pay the REIT roughly $9.3 million annually. Also, Vornado noted that NYU can exercise an option to buy the leased space in 2055 and again in 2095, when the deal is slated to end.
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The plan for the new space is to transform it into an advanced engineering, science, and technology hub. Already, NYU has received $200 million in donations to support the initiative. Currently, a list of existing tenants occupies roughly half the building. As part of the deal, NYU will take over those leases and rental income as floors are redeveloped into classrooms, workstations, and laboratories. While Wegman's will remain a tenant at 770 Broadway, it's unclear if anyone else will stay.
But that will be phase one of the transition, while phase two will involve NYU relocating to the building. It's unclear when exactly this will take place, as the private research university remains in the preliminary stages of design and planning. According to NYU, it operates in eight buildings, which mainly surround Manhattan's Washington Square Park.
NYU expects that the move will save it $800 million on rent during the first 30 years of the lease.
"This space will provide room for incremental growth as well as enable the University to consolidate faculty and research in a collaboration hub focused on battling diseases and saving lives and to foster innovation that will keep the US at the forefront of strategic areas of technology such as AI, biotechnology, and quantum information sciences," NYU said in a statement.
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