On Running Leaves SoHo for 85,000 SF at Vornado's Penn 1

On, the Swiss running brand known as On Running, has signed a 15-year lease for 85,000 square feet at Vornado Realty Trust’s PENN 1 in Midtown, taking the entire 61,000-square-foot eighth floor plus 24,000 square feet on the seventh, according to Commercial Observer. The asking rent was about $120 per square foot. The company is relocating its New York headquarters from 165 Mercer Street in SoHo, a building its landlord bought for $40 million just seven months earlier.

Why it matters

A growth-stage consumer brand outgrowing a boutique SoHo building for a full-floor Class A footprint in the PENN District is the signal Vornado has been chasing since it began repositioning the campus: tenants that are not law firms or asset managers are now anchoring there. For 165 Mercer’s owner, Spear Street Capital, the timing cuts the other way. NYC property records show the San Francisco firm bought the six-story building through 165 Mercer Owner LLC for $40 million in February 2025, financed same-day with a $24 million agreement tied to a Blackstone-registered lender, and it now has to find a replacement for a tenant occupying space equal to a large share of the entire structure. For developers and landlords watching Manhattan office demand, the deal is also a reminder that even a well-capitalized boutique building can lose its anchor to a bigger, cheaper full-floor alternative a mile north.

The numbers

On’s new PENN 1 footprint of 85,000 square feet is nearly triple the 30,020 square feet of total building floor area at 165 Mercer Street across all six floors, per city property records, so the brand is not just adding space, it is moving into a building where a single new floor dwarfs its old headquarters. The asking rent on the new deal was about $120 per square foot for a 15-year term. CBRE’s Sinclair Li, Patrick Moroney and Liz Lash represented On; Vornado’s Jared Silverman and Josh Glick handled the deal in-house.

What’s next

Neither Commercial Observer nor The Real Deal reported a target move-in date, and no replacement tenant has been announced for 165 Mercer. The lease adds to a run of Vornado deals at the PENN District campus this year, and it leaves Spear Street Capital, seven months into ownership, needing to re-lease a building it financed with debt underwritten against the rent roll it is about to lose.