Vornado Realty Trust Refinances NYC Retail Property
- Nov 21, 2018
Vornado Realty Trust just added the property at 150 W. 34th St. in Manhattan to its list of refinancings this year. The REIT secured a $205 million loan to replace an existing loan on the 78,000-square-foot retail building.
The property at 150 W. 34th first opened its doors around 1900. Today, long-time tenant Old Navy clothing store occupies the three-story building in its entirety and will continue to do so for the next few years at least. The company just signed a five-year lease renewal for the space.
Vornado has counted 150 W. 34th St. as part of its portfolio since 2015, when the REIT acquired the building and the accompanying 226,000 square feet of zoning air rights from Starwood Capital Group for $355 million. Vornado financed a portion of the transaction with a $205 million loan bearing interest at LIBOR plus 2.3 percent and carrying a maturity date of 2018, with the option for two one-year extensions. That debt has now been replaced with the newly acquired $205 million loan, which comes at a current rate of 4.2 percent, or LIBOR plus 1.9 percent, and a maturity date in 2024, as extended.
150 is just one of Manhattan assets Vornado refinanced this year. The company replaced a previous $113 million indebtedness at 4 Union Square South, a 206,000-square-foot retail property, with a new $120 million loan. Vornado also refinanced the 1,327-unit Independence Plaza residential complex to the tune of $675 million. Both interest-only loans mature in 2025.
The climate remains favorable for commercial real estate refinancing, particularly with familiar faces. As Ryan Severino, a chief economist with JLL, noted in a news report by the commercial real estate services firm, “When lenders are less stringent and more aggressive with what they’re offering, it increases the probability that an existing borrower will refinance.”
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