Vornado Completes $168M Manhattan Office Refi

The newly constructed 170,000-square-foot property in the Meatpacking District had been fully preleased before completion. Aetna took the office space, while the property also features one of the world’s largest Starbucks.
61 Ninth Ave.
61 Ninth Ave.

A joint venture that’s 45.1 percent-owned by Vornado Realty Trust has completed a $167.5 million refinancing of 61 Ninth Ave. in Manhattan’s Meatpacking District.

Rafael Viñoly Architects designed the newly constructed nine-story, 170,000-square-foot, Class A office building. The office space is fully leased to Aetna, and its retail component is home to the world’s largest Starbucks store.

The seven-year, interest-only loan carries a rate of LIBOR plus 1.35 percent (currently 3.79 percent) and matures in January 2026. Vornado reportedly realized net proceeds of about $31 million in the transaction. The loan replaces the previous $90 million construction loan, which bore interest at LIBOR plus 3.05 percent and was scheduled to mature in 2021.

A Vornado spokesperson declined to provide additional information requested by Commercial Property Executive.

The property is subject to a 101-year unsubordinated net ground lease held by Prince Lumber, the previous occupant of the site, according to Yardi Matrix.

Class A surge spurs rents

The average Class A asking rent in Manhattan’s Midtown South “jumped 10 percent in the third quarter to $93.40 due to the completion of several new Class A office buildings in the Meatpacking/Chelsea area,” according to a third-quarter 2018 report from the Alliance for Downtown New York.

That reportedly was a key factor in Lower Manhattan’s overall average asking rent having hit $63.70 per square foot, a new record and the second record-setting quarter in a row, also per the ADNY report.

Image courtesy of Vornado