Vornado Secures $150M in Financing

Many office asset owners are scrambling to refinance or restructure debt as maturities approach. However, Vornado Realty Trust is in no such position as it closes financing for its 506,000-square-foot office property at 2121 Crystal Drive in Arlington, Va.

February 14, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user cliff1066tm

Many office asset owners are scrambling to refinance or restructure debt as maturities approach. However, Vornado Realty Trust is in no such position as it closes $150 million in financing for its 506,000-square-foot office property at 2121 Crystal Drive in Arlington, Va., which was previously unencumbered.

According to Arlington County records, the asset’s 2011 assessed value is $154.8 million. Also known as Crystal Park Two, the newly financed 2121 Crystal sits in Arlington’s Crystal City submarket, with the Pentagon, Reagan National Airport and Washington, D.C., within close reach.

The 12-story building, developed in 1985 and renovated in 2006, suffered a huge vacancy in 2006 when the U.S. Patent and Trade Office vacated over 400,000 square feet. However, in 2009, Lockheed Martin soaked up much of the vacancy with under a 229,000 square-foot lease. As per Vornado’s website, the Class A property is presently 99.8 percent occupied, a factor that most likely played a roll in the company’s ability to secure financing, which came in the form of a 12-year fixed rate loan with a 5.51 percent interest rate.

It’s not just 2121 Crystal that has a full tenant roster in the area. While Arlington’s office market has a vacancy rate of 6.5 percent, as noted in a report by commercial real estate services firm Cassidy Turley, the vacancy rate for Class A properties is 0.0 percent.