Vornado Undergoes $950M Refinancing of Manhattan’s 1290 Avenue of the Americas
- Nov 14, 2012
Just several months away from completing a redevelopment of 1290 Avenue of the Americas in Manhattan, Vornado Realty Trust and the partnership that owns the 2 million-square-foot, 43-story building have completed a $950 million refinancing of the property.
The 10-year interest-only loan has an interest rate of 3.34 percent. After repaying the existing loan and closing costs, net proceeds of the refinancing were about $522 million.
Vornado owns a 70 percent controlling interest in the partnership. Donald Trump owns the remaining 30 percent interest. The Paramus, N.J.-based REIT acquired the 70 percent controlling interest in May 2007 at the same time it acquired 555 California St., located in San Francisco’s financial district. Vornado paid $1.8 billion – $1.01 billion in cash and $797 million in existing debt – for its controlling interests in both trophy office buildings.
The Class A office tower is in the heart of midtown Manhattan and takes up the entire block of Avenue of the Americas, also known as 6th Avenue, between 51st and 52nd streets. Its high-profile tenants include Axa Equitable, Cushman & Wakefield, Warner Music Group, Microsoft and several law firms such as Bryan Cave L.L.P. and Fitzpatrick, Cella, Harper & Scinto.
Built in 1963, the office building’s floor plates range from 25,000 square feet to 100,000 square feet. Vornado is in the midst of a renovation at 1290 Avenue of the Americas that is expected to be completed in the first quarter of 2013. Among the renovations are significant upgrades to the exterior and the lobby, which are being designed by New York City-based architecture firm Moed de Armas & Shannon.
“This renovation will dramatically enhance the building’s street presence. We worked hard to give the building a lobby it deserves – a monumental entry sequence with timeless materials and sophisticated detailing,” said Dan Shannon, a MDEAS principal.
The firm has also worked on other Vornado-owned buildings, including a total redevelopment of 330 Madison Ave. and the lobby and plaza at 1740 Broadway.
For Vornado, the refinancing of 1290 Avenue of the Americas is the fourth refinancing deal the REIT completed on Manhattan properties this year. The first, Eleven Penn Plaza, actually closed in late 2011 but wasn’t announced until January, 2012. The REIT also refinanced 100 W. 33rd St. and 350 Park Ave. earlier this year. The REIT had said in its fourth-quarter 2011 earnings report that nearly $1.3 billion in outstanding debt was due to mature this year.