Leasing velocity at the 24-story, 608,000-sf, class A office building built in 1916, has substantially increased within recent months, according to CB Richard Ellis, which handles activity at the site. Another tenant in the site, the Steamfitters Industry Trust Funds, also renewed its lease of 13,562 sf also for 10 years.

But it's not just lease renewals--new tenants are attracted to the site, adjacent to the home of the new Penn Station. Edwards & Kelsey, an engineering firm, negotiated a new lease on the 16th floor, while construction development firm URS, expanded from One Penn Plaza to 5 Penn Plaza on the 13th floor.

"What's significant is that this recent activity demonstrates a flight to quality, as many tenants desiring a base in the Penn Plaza district are choosing buildings with improved infrastructure," says Peter Turchin, senior vice president at CBRE, who together with his team spearheads the leasing agency at 5 Penn Plaza. He says these transactions "set the stage" for the next two blocks of space that are coming available within the building, namely the CNN penthouse floors in the third quarter of 2004 and the New York State Department of Health space in the first quarter of 2005.