Snap’s 199K SF PENN 2 sublease is another data point in Manhattan’s office recovery

Last updated: October 13, 2026

Snap Inc. Has signed a 198,893-square-foot sublease at Vornado Realty Trust's PENN 2 office tower near Penn Station, according to CRE Daily. The deal ranks among Manhattan's largest transactions in July, and it lands in a market on pace for its strongest year since 2000.

The short version

• Tenant: Snap Inc.
• Building: PENN 2, owned by Vornado Realty Trust
• Size: 198,893 SF
• Deal type: sublease
• Rank: fourth-largest Manhattan office lease in July
• Larger July deals: Anthropic 465,630 SF, NBCUniversal Media 244,185 SF at 1221 Avenue of the Americas, Aon 202,002 SF at 1 Liberty Plaza
• Manhattan July leasing total: 3.87 million SF, up sharply year over year
• Midtown South asking rent: $79.13 per SF, higher than a year earlier
• Vornado's NY office portfolio: near stabilized occupancy in June 2026

Background: how PENN 2 got back in the game

PENN 2 is one of Vornado's flagship repositionings. The project added a new exterior wall, an extended blockfront, open corner features, and a tall ground-floor lobby. That is a bet on tenants wanting modern office product near transit, and it is paying off.

Snap is the latest major tenant. Altana AI and Veeva took a combined 125,000 SF in June. Last October, three more large commitments landed: Robinhood, Dick's Sporting Goods, and FGS Global, totaling more than 331,000 SF, according to CBRE. The pattern is consistent: a refurbished building, transit access, and a tenant mix that looks like a barbell of AI, finance, and consumer brands.

Our analysis: what it means for you

For anyone underwriting New York office, the question is no longer whether the market has stabilized. It is whether the rebound is durable, and which product captures it. PENN 2 is the answer that owners of similar product want to hear. Renovated, transit-adjacent, full-floor tenant interest. The properties that lost out are the unrenovated mid-block product without a clear identity.

For investors, the sublease angle matters. A company is taking down 199K SF on a sublease, which usually means another tenant is exiting or shrinking. New York's occupancy recovery is partly demand and partly redistribution. Watch which sublease space comes back to market, and at what rent.

For brokers, the comp set is rich. Asking rent in Midtown South is $79.13 per SF, higher than last year. Several buildings are pushing toward full occupancy. That is the basis for any pricing on new office product coming to market.

A worked example

Say you are an LP in a value-add fund that bought a 1980s Midtown office tower two years ago at a 6 cap. Your leasing assumptions assumed modest rent growth over five years. Midtown South is delivering rent growth now. Your asset is not PENN 2, but the comp set has moved. Refinance timing matters. If you can lock in a refi at the same rate with materially higher NOI, the equity check doubles.

What to watch next

Watch the next few months of Manhattan leasing data to see whether July's year-over-year gain holds. Watch sublease availability in Midtown South, which is the cleanest gauge of whether the recovery is real demand or just reshuffling. Watch Vornado's earnings for PENN 2 economics. The bigger story is whether the ask rents translate to net effective rent after concessions.

Key takeaways

• Manhattan office leasing in July was 3.87 million SF, up sharply year over year, in line with the strongest year since 2000.
• Snap's 199K SF PENN 2 sublease shows the recovery skews to renovated, transit-adjacent product.
• The next data points to watch are sublease availability and net effective rent, not just headline asking rent.