Vornado Scores Big at Vintage Manhattan Building

A refinancing yields $192 million in proceeds for the REIT.
85 Tenth Ave in Manhattan

85 Tenth Ave. in Manhattan

New York—As part of a $625 million refinancing of 85 Tenth Ave. in Manhattan, Vornado Realty Trust has received $192 million and a 49.9 percent interest in the 11-story, 168,000-square-foot building.

Vornado received the $192 million from the refinancing proceeds in repayment of multiple loans to Related. In 2007, Vornado made $50 million in 11 percent payment-in-kind mezzanine loans, and in 2013 and 2014 the REIT funded an additional $23 million.

In conjunction with the repayment, in the fourth quarter Vornado will recognize a financial statement gain of approximately $161 million and no tax gain.

Related did not respond to Commercial Property Executive’s request for additional information.

The major portion of the latest indebtedness is a $396 million, 10-year loan funded by Deutsche Bank and Wells Fargo that carries a fixed, weighted-average interest rate of 4.55 percent, according to Yardi Matrix data.

The property, which is 100 percent leased, was built in 1913 as an industrial building, was converted to office use in 1993 and underwent a major renovation in 2001. The building is located on the border of the West Chelsea and Meatpacking districts, directly across the street from Chelsea Market and The High Line, with direct Hudson River views.

The building’s primary office tenants are Google, the General Services Administration, Telehouse International, L-3 Communications and Moet Hennessy USA. The four retail tenants are all restaurants: Atelier de Jöel Robuchon, Sons & Daughters, Del Posto and Toro NYC.

Related had purchased the asset from The Somerset Group in 2007 for $430 million, again according to Yardi Matrix.

Image courtesy of Yardi Matrix