Vornado Seeking Recap for 2 Trophy Towers
- Jun 24, 2020
Amid intense uncertainty in the office market, Vornado Realty Trust announced it is exploring the potential “recapitalization” of two trophy towers jointly owned by the Trump Organization. The feeling in the industry is that the process will likely end in a sale of Vornado’s interest and the Trump Organization’s as well.
Vornado is the majority owner of 1290 Avenue of the Americas in Manhattan and 555 California Street in San Francisco with a 70 percent stake, with The Trump Organization. holding the remaining 30 percent in the two assets. According to Bloomberg sources, the Trump Org. may also sell its stake.
The 2.1 million-square-foot 1290 Avenue of the Americas became part of Vornado’s holdings in 2007, when the company acquired a majority stake from Hudson Waterfront Associates in a $1.8 billion portfolio deal, according to Yardi Matrix data. In 2012, the property became subject to a $950 million portfolio loan held by U.S. Bank, which had an initial maturity date in 2017 but received a continuation in the same year, public records show. AXA, Columbia University and Neuberger Berman are among the tenants on the building’s roster.
Vornado purchased the 1.5 million-square-foot 555 California Street—San Francisco’s fourth-tallest building—in the same 2007 portfolio transaction. The property is part of a $600 million financing package originated by Pacific Life Insurance Co. in 2011. The portfolio loan has a maturity date set for September 2021, Yardi Matrix shows. Tenants at the property include Microsoft, Jones Day and McKinsey & Co.