NEW YORK CITY-Looking to capitalize on increased Manhattan travel and tourism, two REITs are banding together to reposition a prime Times Square retail spot. Vornado Realty Trust and Bethesda, MD-based Host Hotels & Resorts, Inc. have entered into a lease at the New York Marriott Marquis in Times Square allowing Vornado to redevelop the retail and signage components of the 1980s-era hotel at 1535 Broadway.

Under the arrangement, Vornado plans to spend as much as $140 million to redevelop and expand the existing space, including converting the below grade parking garage into retail, and creating six-story, 300 feet wide block front LED sign. Over the term of the 20-year lease, both REITs have options that, if exercised, would result in ownership of the leased space being conveyed to Vornado at price based on future cash flow of the lease property, the companies said in separate statements today.

The 1,900-key hotel – located in the heart of the “bow tie” at 45^th and 46^th Streets on Broadway – is one of the largest in Manhattan. The property is directly across from Vornado’s 1540 Broadway leased to Forever 21 and Disney flagship stores.