MetLife Loans $300M On West 34th Office Property

New York-based Vornado Realty Trust announced that it completed a $300 million recourse financing of 7 West 34th Street with a loan provided by Metropolitan Life Insurance Co. Vornado also announced that it has sold a 47% interest in the property to Korea Post, a sovereign wealth fund under the national postal service of South Korea, at a value of $561 million or $1,176 per square foot. Vornado originally purchased the 12-story office building in October 2000 for approximately $128 million from HRPT Properties Trust, which purchased it from Devon Properties in October 1997 for $110 million.

Built in 1910 and once home to Ohrbach's Department Store, the 477,000 square foot Manhattan office building in the Penn Plaza District sits across the street from the Empire State Building and is fully leased to Amazon in a 17-year contract signed in November 2014, with three five-year lease options that could stretch the lease until 2047. Vornado made significant capital improvements to the property in recent years, enlisted the architecture firm MdeAS — best known for its redesign of the GM Building's public plaza — to transform the lobby, and included upgraded elevators, new restrooms and a large outdoor terrace. Vornado will continue to own a 53% interest and continue to manage and lease the property.

For more news and information visit Blumberg Partners.

Vornado Secures $273M Loan to Refinance Warner Building

Vornado Realty Trust, the New York-based equity real estate investment trust, announced that it has completed a $273 million refinancing of The Warner Building in Washington, DC. The seven year loan provided by TIAA-CREF has a fixed rate of 3.65%, a step away from the previous 6.26%/$293 million mortgage on the office building that was set to mature on May 12. Washington Business Journal reported in April that Vornado faced the prospect of defaulting on its previous loan, which had been transferred to special servicer LNR Partners Inc., according to debt monitoring firms Fitch Ratings and Trepp LLC. The building is owned by a joint venture between Vornado Realty Trust, controlling 55%, while Canada Pension Plan Investment Board controls the remaining 45%.

Located at 1299 Pennsylvania Avenue, the 621,000 square foot office building was built in 1993, renovated in 2012, and sits just three blocks from the White House and overlooks Freedom Plaza. Designed by Pei Cobb Freed & Partners, The Warner Building features a dramatic sky-lit interior atria, a rooftop terrace, fitness center and 24 hour on-site security. The property is currently 88% leased, with major tenants including General Electric, Facebook, Hewlett Packard and APCO Worldwide, with ground floor retail tenants including Au Bon Pain and the Warner Theatre.

For more news and information visit Blumberg Partners.

Amazon Takes Full Manhattan Building on 34th

Vornado Realty Trust has completed a 17 year lease for all 12 floors at 34th Street, confirming that Amazon is increasing its footprint in Manhattan, and further fueling speculation that the company will open its first retail store. The office building is in the Penn Plaza District where Vornado owns approximately 9 million square feet of commercial space.

"We have leased this building primarily as corporate office space and we intend to sublease to other tenants the ground floor retail space," Amazon spokeswoman Kelly Cheeseman said in a statement. Reports last month indicated Amazon was planning to open an experimental retail store in New York, which would showcase a few of the retailer's flagship products, according to a Business Journal article. Amazon could also use the space as offices for its growing publishing arm. That would be incredibly controversial in the publishing capital of the world, where many publishers set up shop. Amazon had a recent battle with Hachette Publishing Group over ebook pricing.

"While details were not published regarding the lease-term and the strategy (same-day pick-up vs. retail-orientation, for example), should Amazon view the branding and same-day convenience benefits of retail stores as significant enough to roll out more in the future, the omni-channel retail spectrum would essentially be complete," said Paul Morgan, research analyst at MLV & Co. This would "assuage investors concerns about long-run shopping center demand and reemphasize the centrality and stability of bricks-and-mortar retail and retail REIT portfolios."

For more news and information visit Blumberg Capital Partners.

Vornado Selling San Jose Power Center for $203M

Vornado Realty Trust, a fully integrated equity real estate investment trust, announced this week that it had entered into an agreement to sell The Plant, a power strip shopping center in San Jose, CA, to Cole Credit Property Trust IV for $203 million. Vornado bought The Plant retail complex for an estimated $120 million to $150 million in 2010, according to public records and sources familiar with the commercial property market in the area.

"There are way more buyers than there are quality retail properties to buy," said David Taxin, a partner with Meacham/Oppenheimer, a commercial realty firm that specializes in the retail market, regarding the sale in a San Jose Mercury News article. "We are seeing multiple offers for any retail property that hits the market that is decent."

The 643,000 square foot retail property is at the northwest corner of Monterey Road and Curtner Avenue, with anchors that include Best Buy, Target and Toys 'R' Us. Since some of the retailers own their own space, Cole Credit Property Trust IV is buying only 510,000 square feet. The sale, which is subject to customary closing conditions, is expected to be completed by the second quarter of 2013.

For more news and information visit Blumberg Capital Partners.

1290 Avenue of the Americas Gets $950M Loan

Vornado Realty Trust, a fully integrated equity real estate investment trust, announced this week that the partnership that owns 1290 Avenue of the Americas in Manhattan has completed a $950 million refinancing of the property. Reportedly Deutsche Bank, Goldman Sachs, UBS Securities and the Bank of China financed the loan with commercial mortgage-backed securities.
Vornado owns 70% of the property, while Donald Trump's organization owns the remaining 30%.

The Master Servicer and Special Servicer will be Wells Fargo Bank, National Association rated 'CMS2' and 'CSS2-', respectively, by Fitch. The net proceeds from the refinancing were approximately $522 million after repaying the existing loan and closing costs.

The 43-story, 2.1 million square foot office building is approximately 95% leased by 27 tenants as of September 2012, and owned and managed by affiliates of Vornado Realty Trust. 1290 Avenue of the Americas is currently undergoing major renovations, to include new turnstile access systems, and upgrades to the cooling tower, chillers, restrooms and telecommunications spine, and new tenant-proprietary back up generators.

For more news and information visit Blumberg Capital Partners.

Vornado Sells Mart Assets for $228M

Vornado Realty Trust announced this week that it had agreed to sell its Mart segment assets, including the Washington Design Center, the Boston Design Center, the L.A. Mart and the Canadian Trade Shows, for approximately $228 million. According to a CoStar report, the sale of the L.A. Mart has already closed at $55 million to PHR LA Mart LLC with 9-month seller financing. The 12-story structure includes 793,158 square feet and is a one-of-a-kind design center, office and showroom building in the downtown area.

As previously reported in January, Vornado sold the Mart segment's 350 West Mart Center for $228 million, resulting in a $55 million gain. Vornado also is in the process of transferring 7 West 34th Street to its New York segment. Vornado said that the sales of the Canadian Trade Shows had also closed, with the other sales expected to close in the third quarter. The company will recognize an $11.9 million loss in the second quarter and a $24.5 million gain in the third quarter from the sale of Canadian Trade Shows.

For more news and information visit Blumberg Capital Partners.

New Plans Revealed for Downtown Crossing Development in Boston

Millennium Partners unveiled new developments plants this week to build a 600 foot tower, filled with apartments and condominiums, while revitalizing the Burnham Building that once held Filene's, according to a CBS Boston report. Handel Architects designed the new plan for the property, renovating the original 1912 building, conceived by architect Daniel Burnham, and setting it against a new 55 story glass tower.

In February, New York-based Millennium reached a deal to buy into the project — the terms call for Vornado Realty Trust to remain an investor, while other investors would sell their stakes — and come up with a new development plan according to a WSJ article. "The project intends to present the simultaneous and harmonious pairing of new and old, and will consist of uses that will ensure a vital, 24/7 city-sector," Millennium said in a prepared statement.

In a statement Monday, Mayor Thomas Menino of Boston offered support for the new design. "Millennium Partners has always been a real partner of the City of Boston," he said. "They continue to do excellent work leading the way in the building of an exciting new day for the area of Downtown Crossing."

The 1.3 million square foot, $615 million development will be called Millennium Tower/Burnham Building and include 200,000 square feet of office space, 230,000 square feet of retail, 500 condo and rental units plus an underground parking garage. Millennium has held a number of pre-permitting meetings with the Boston Redevelopment Authority to review the proposal, and has already begun the required environmental impact studies for the project under Article 80, expecting to have the results of the studies ready for public review and comment within 60 days, the company said. Millennium says it hopes to start construction by the end of the year, pending approvals.

For more news and information visit Blumberg Capital Partners.

Merchandise Mart Sells $228M Chicago Property

Merchandise Mart Properties, Inc., a subsidiary of Vornado Realty Trust, completed the sale of the Shops at the Mart for $228 million to Shorenstein Properties on behalf of its Shorenstein Realty Investors Ten LP fund. According to a CoStar report, the building park sale equals roughly $188 per square foot; Vornado previously purchased the property in 1998 for $77.6 million.

Commenting on the purchase of 350 West Mart, Shorenstein Properties' CEO Douglas Shorenstein said: "This is a well located asset with a floorplate and infrastructure that appeals to technology, creative use and financial tenants choosing to locate in major 24-hour cities such as Chicago."

The Shops at the Mart is located on two floors of the Merchandise Mart in Chicago, Illinois with high-end boutiques and lunch spots dominate the face of the mall. The Shops originally opened in September 1991, anchored by Carson Pirie Scott & Co. and The Limited. The property covers more than 1.2 million square feet of space in two adjoining 13-story towers and a long-term lease to the 521-room Holiday Inn Mart Plaza.

For more news and information visit Blumberg Capital Partners.

CPPIB Invests $91M in DC Market

The Canada Pension Plan Investment Board (CPPIB) announced a joint venture with Vornado Realty Trust wherein CPPIB acquired a 45% ownership interest in two Washington, DC properties for $91 million according to a CoStar report. CPPIB made an equity investment to assume 45% of the existing mortgage indebtedness for 1299 Pennsylvania Avenue (the Warner Building) and 1101 17th Street NW, two prime office properties in Washington D.C. owned by Vornado. Vornado Realty Trust said, "We are pleased to have CPPIB, one of the world’s most prominent institutional real estate investors, as a new partner in these two buildings. Like us, they primarily focus on top quality properties in major U.S. cities."

The Warner Building, is a 13-story class A office building with over 600,000 square feet of space located some three blocks east of the White House. The building also includes the historic Warner Theatre, a 1,850-seat theatre that has been restored to its original grandeur. 1101 17th Street NW is a 13-story office building containing over 200,000 square feet on the North East corner of L Street and 17th Street NW in Washington’s commercial/business district.

For more news and information visit Blumberg Capital Partners.