January 4, 2012
By Dees Stribling, Contributing Editor
Vornado Realty Trust rang out the old year by completing a $330 million refinance for 11 Penn Plaza, a 1.1-million square-foot office building in Manhattan. The REIT, which specializes in office properties, realized proceeds of about $126 million from the deal after repaying the existing loan and associated closing costs.
The seven-year loan bears interest at Libor plus 2.35 percent, which on Jan. 3 was 2.64 percent. The loan amortizes based on a 30-year schedule beginning in the fourth year.
The 23-story structure dates from 1923, with renovation work done in 1982. Major office tenants include AMC Networks, Macy’s, Rainbow Holdings and Madison Square Garden. It is one of a cluster of properties that Vornado owns in the area; others include One and Two Penn Plaza, 100 W. 33rd St. and 330 W. 34th St.
Vornado, like many other debt-holders, has been taking advantage of the persistent low-interest climate and the fact that lenders are keen on Manhattan properties once more to refinance to its benefit. In December, the company set up a joint venture with the Kushner Cos., the owner of 666 Fifth Ave., which allowed for the conversion of an existing $1.2 billion mortgage into a $1.1 billion A-note coupled with a $115 million B-note.