Vornado Completes $350M Refinancing of NYC’s 909 Third Ave.
- Apr 18, 2014
Vornado Realty Trust has completed a $350 million refinancing of 909 Third Ave., a 33-story, 1.3 million-square-foot Midtown Manhattan office building.
The Paramus, N.J.,-based REIT said the seven-year loan is interest only at 3.91 percent. The company realized net proceedings of approximately $145 million after repaying the existing 5.64 percent, $193 million mortgage, defeasance and other closing costs, according to a Vornado news release.
Further information on the transaction was not available.
The building is located on the east side of Third Avenue between 54th and 55th streets and has a U.S. Post Office on the first four floors. The asset is fully leased with tenants including Citibank, Forest Laboratories, Geller & Co., Morrison Cohen and Proctor & Gamble.
The announcement comes about four months after Vornado refinanced another Manhattan office building, the 23-story, 1.1 million-square-foot Eleven Penn Plaza for $450 million. The company realized net proceeds of about $107 million after repayment of the existing mortgage and closing costs. Like 909 Third Ave., 11 Penn Plaza was refinanced with a seven-year interest-only loan. The rate on it was 3.95 percent.
Vornado has taken steps recently to focus more on its urban office holdings in New York City and Washington, D.C., and its Manhattan street retail assets. Earlier this month, the REIT announced its Board of Trustees had approved a plan to spin off its shopping center businesses consisting of 81 strip shopping centers and four malls into a new publicly traded REIT, SpinCo. The 85 retail properties total approximately 16.1 million square feet. Vornado did not include Beverly Connection mall in Los Angeles and Springfield Town Center in Springfield, Va., because they are scheduled to be sold.
The REIT said that after the spinoff 91 percent of its EBITDA will be generated by the New York City and Washington, D.C., assets, with 67 percent of that coming from the New York holdings.