On Expands NYC Headquarters to 85,000 SF at PENN 1
Updated: Sep 29
Swiss athletic footwear and apparel company On is making a significantly larger, long-term commitment to New York City.
According to Commercial Observer’s report on the transaction, On is relocating its New York headquarters from 165 Mercer Street in SoHo to 85,000 square feet at Vornado Realty Trust’s PENN 1, under a 15-year lease.
The new headquarters will include 61,000 square feet across the entire eighth floor and another 24,000 square feet on the seventh floor, including access to an outdoor terrace. The move represents a substantial expansion from On’s current New York office.
Location is also an important part of the decision. PENN 1 sits within Manhattan’s Penn District, directly adjacent to one of the city’s largest transportation hubs. Vornado has been carrying out a broader $2.5 billion revitalization of the Penn District, including more than 5 million square feet of redeveloped Class A office space, public plazas, transportation improvements and expanded retail. Vornado’s Penn District update
On’s expansion also fits into a broader office-market trend ARCFE has been following. Recent Manhattan leasing activity has shown increasing competition for high-quality office space, while New York’s growing technology and professional talent base continues to support corporate office demand. Read ARCFE’s analysis of New York’s tech talent and office demand.
Why On’s NYC Headquarters Expansion Matters for New York Real Estate
The most important part of this transaction is not simply that another company signed an office lease.
On is expanding its footprint and committing to the location for 15 years.
Long-term corporate leases provide a useful signal about how businesses view New York as a place to operate, hire and grow. One lease cannot represent the entire Manhattan market, but when global companies continue making sizeable, long-duration real estate commitments, it adds to the evidence of sustained business demand for well-connected New York locations.
That matters beyond the office sector.
Employment centers, transportation and housing markets are connected. Residential demand does not come from office leases alone, but access to major employment districts is one of the factors that can influence where people choose to live.
This is why ARCFE also considers transportation access and proximity to major employment centers when evaluating residential locations such as Long Island City, home to ARCFE Group 22 | Skyline Tower II.
EB-5 Investor Insight
For EB-5 investors, corporate expansion provides another way to understand where real estate demand ultimately comes from.
Residential projects need residents and buyers. Those residents, in turn, often consider employment opportunities, commuting time, transportation access and surrounding amenities when choosing where to live.
A single headquarters lease cannot predict the performance of a residential project. But a city that continues to attract companies willing to expand and make long-term commitments has a broader economic foundation supporting real estate demand.
ARCFE View
For ARCFE, On’s PENN 1 lease is valuable because it illustrates how different parts of New York’s real estate market connect.
A successful city real estate market does not depend only on new residential construction. It also depends on companies willing to operate here, employees who need access to those companies, transportation that connects neighborhoods to employment centers, and capital willing to support the surrounding real estate ecosystem.
With nearly 20 years of New York real estate lending experience through iCross Capital, ARCFE looks at these demand drivers when evaluating real estate-backed EB-5 projects.
The question is not only whether a building can be completed.
It is also:
When that building enters the market, does the surrounding city continue to attract the people, businesses and capital needed to support real estate demand?
On’s 15-year expansion at PENN 1 provides another positive data point in that broader New York story.
Sources
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Disclaimer: Articles published under the "News" category are curated from third-party media sources for informational purposes only. ARCFE does not claim ownership of the original content, nor does it guarantee the accuracy, completeness, or timeliness of the information presented. The views and opinions expressed in these articles are those of the original authors and do not necessarily reflect the position of ARCFE. Nothing contained herein constitutes investment, legal, or tax advice. Readers are encouraged to consult with qualified professionals before making any investment decisions.
