Vornado Secures $120M for Manhattan Retail Property
- Aug 15, 2018
Vornado Realty Trust has refinanced 4 Union Square South, a 206,000-square-foot retail building located on E. 14th St. in Manhattan, to the tune of $120 million. Wells Fargo Bank provided the loan, according to New York records.
Vornado acquired 4 Union in 1993 for $17 million, and 10 years later the REIT invested $47 million in the comprehensive redevelopment of the six-story structure into a premier retail destination designed by Beyer Blinder Belle and Brennan Beer Gorman. Today, the multi-tenant building is home to such national names as Whole Foods, fashion retailer Forever 21 and off-price department store Burlington, which signed a lease for 93,000 square feet in 2012.
Vornado will utilize proceeds from the new financing, which has a maturity date of 2025, to pay off a previous $113 million of indebtedness scheduled to mature in 2019. Both loans are interest only; however, the new financing offers a rate of LIBOR plus 1.4, compared to the previous loan’s rate of LIBOR plus 2.15 percent.
The 4 Union transaction dovetails with Vornado’s current strategy. As noted in the REIT’s 2017 annual report, “During 2018 and 2019, [approximately] $138.8 million and $210.8 million, respectively, of our outstanding debt matures; we may refinance this maturing debt as it comes due or choose to repay it.”
Earlier this year, Vornado’s 50.1 percent owned joint venture at Independence Plaza completed the $675 million refinancing of the Manhattan residential and retail complex. The REIT also secured a $100 million loan for the refinancing of the 471,000-square-foot office building at 33–00 Northern Blvd. in Long Island City, N.Y. 2017 was also an active year of refinancing for Vornado. Along with partner SL Green Realty Corp. the REIT refinanced the 1.3 million-square-foot trophy office property at 280 Park Ave. with a whopping $1.2 billion loan.