Steven Roth
Chairman of the Board & Chief Executive Officer at Vornado Realty Trust
Thank you, Steve, and good morning, everyone. That tornado business is good, really good and getting better. New York is our home and everyone agrees that the New York real-estate markets are head and shoulders strongest in the nation. As I have said before, while New York has over 400 million square feet of office, we really only compete in a narrower market of about 188 million square feet of the better space. Availability in the better space market is 10.7% versus 20.1% in the not better space market. And that 10.7% availability is evaporating very quickly. Park revenue is already under 7%. Add to that, that the cost of a new-build tower in New York has just about doubled over the last six to seven years. And with the cost of debt at, say, 6%, new supply is frozen. There hasn't been a major new building start in five years and once started, delivery takes five to seven years. Taken together, this all creates a landlords market. We expect rents to rise aggressively, one might even say rents to spike. And in fact, rents have already started to rise. So all good, very good.
Why New York? New York is America's world city. New York's human and physical capital is irreplaceable. We have the largest, most educated workforce, the best transit system for commuting from our vast suburbs. You may read this as a plug for the Penn District and I guess it is. The largest number of corporate headquarters, the best restaurants and museums and eight professional sports teams, even though the damn Yankees can't seem to beat the Brooklyn.
I would like to focus on a few points and a handful of our recent accomplishments. Work-from-home was a scare, but as we predicted, it would not last and is not last. Most have left their kitchen tables and are back at the office. Our stock price increased 49% in 2024 after increasing 35% in 2023. In 2024, we leased 3.4 million square feet overall, of which 2.65 million square feet was New York office at market-leading $104 starting rents with mark-to-markets of 2.5% cash and 10.9% GAAP for the second year in a row, we completed the most premium $100 plus deals in New York and 18 transactions for 1.36 million square feet. And we completed three of the top-10 largest office deals in New York.
We completed 285,000 square feet of deals at PEN1 at $98 starting rates, exceeding our underwriting. We completed 25 retail leases totaling 187,000 square feet, highlighted by Manhattan's first-in the Penn District. We completed the sale at 665th Avenue at a record price of $20,000 per square-foot. Last month, we repaid at maturity out of 3.5%, $450 million unsecured bonds out of cash on-balance sheet and $108 million off our credit line. Our entire portfolio was 100% lead certified and we are the first-in the nation to achieve this milestone.
We are on the two-yard line with a handful of important deals. We finally complete -- we will finally complete the master lease to NYU at our 1.1 million-square-foot 770 Broadway by the end-of-the month. This deal will relieve our balance sheet of $700 million of debt on this asset and eliminate 500,000 square feet of vacancy. By the way, this large and impressive building on the edge of the NYU campus will be their science center. I have seen the plans, it will be a world-class education facility, which will make NYU an even greater or least higher-education institution. That's great for NYU and that's great for New York.
We will shortly refinance 1535 Broadway, which will allow us to redeem for cash over $400 million of our retail JV preferreds. And we have several asset sales in the works. Taken together, these transactions will shortly generate an incremental additional $1 billion of new cash. At PEN2, we are only weeks away from signing a 300,000 square-foot lease. PEN2 is being very well-received by tenants and brokers with commentary that it is the best redevelopment anyone has ever seen and together with PEN1 has by far the biggest and best amenity package anywhere. We are also engaged in multiple tenant proposals at Pend 2, including negotiating an LOI for a major headquarters lease. I'm predicting that will likely be 80% leased by year-end. We are achieving rents here above our underwriting and accordingly, we have increased the incremental yield on Page 16 of our supplement to 10.2%.
We will deliver -- we will deliver Peer 94 on Manhattan's West Side by year-end 2025, the first-ever purpose-built film and television South stages in Manhattan. Now for those interested in Alexander, our 32.4% owned affiliate. In the second-quarter of 2024, we early renewed the 947,000 square-foot Bloomberg office lease at 731 Bexington Avenue, whose expiry is now pushed out to 2040. At Regal Park in Queens, we are moving Burlington and Marshalls, the last remaining tenants at Regal One to our adjacent Rego 2 shopping center, thereby filling up Rego 2 and creating a fully vacant blank canvas at Rego 1 for either sale or development. Obviously, we believe this unique five-acre parcel of land wonderfully located at the intersection of Queens Boulevard and Junction Boulevard and bordering the Long Island Expressway is worth more as land than the 66-year-old building. I believe Alexander's stock substantially undervalues its assets and we will have to do something about that.
350 Park Avenue development is on-schedule. The new building is now fully designed and it will stand-out as being truly, truly best-in-class. We are in the formal approval process under the Midtown East zoning and Citado, our major tenant and Ken Griffin, our partner, will shortly begin moving out of 350 Park into swing space, so the demolition can begin early next year.
I end by noting how proud our Vernado teams all are of our accomplishments to date in the Penn District. Take a look at Meta at Farley, PEN1, PEN2, the Moynihan Train Hall, the Long Island Railroad Concourse, the 33rd Street Plaza and even Penn 11 and how excited we all are about the future of our city within a city. Next up is the hotel Penn site, now down to the ground and ready to go. Our pen district is clearly a site to be seen. If you haven't already seen it, please call me to arrange a tour.
Now to Michael.
