The parent company of Facebook, Instagram and WhatsApp is reducing its New York City office footprint, leaving its longtime landlord partner Vornado Realty Trust with extra space to carry.

Meta Platforms is cutting its 775K SF lease at Vornado’s 770 Broadway to 500K SF, a reduction of roughly a third, Crain’s New York Business reported.

Roughly 275K SF of Meta’s lease is due to expire in June, Vornado executives revealed on an earnings call Tuesday, leaving the REIT with a sizable amount of space to fill at the 1.2M SF landmarked building.

The remaining 500K SF in the Greenwich Village property is the subject of a long-term lease, Vornado Executive Vice President and co-Head of Real Estate Glen Weiss told analysts on the earnings call.

“We continue to be in the market with that building,” he said, according to a transcript. “We expect that building to perform as we move along here.”

The social media giant is Vornado’s largest tenant, Crain’s reported. Facebook initially leased space at 770 Broadway in 2018, tacking on more in 2022. Meta then leased 730K SF at 390 Ninth Ave., known as the Farley Building, in 2020 — where Vornado is the majority owner — and has additional space in Hudson Yards.

Vornado's New York City office portfolio finished the year with occupancy at 89.4%, according to its earnings report. That is a decline from the year before, when occupancy was 90.4%, according to its 2022 annual report.

The Manhattan-based landlord expects its funds from operations, a key performance metric for REITs, to decline in 2024, but the office leasing market appears to be on the edge of a tentative recovery, CEO Steven Roth said on the call. The company leased up 840K SF in NYC in the fourth quarter, bringing it to a total of 1.2M SF for the year with asking rents averaging at around $100 per SF.

“While rents have a way to go to reach peak pricing of five years ago, we feel very good about the activity level and strength of the retail recovery,” Roth said.

But the company’s return to peak performance may take longer than previously expected, executives said. Its Penn 1 and Penn 2 towers may take until 2026 to produce enough rental income to service its debt, Vornado President and Chief Financial Officer Michael Franco said.

“We’re trying to be realistic,” Franco said on the call.