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Real estate giant Vornado has completed a $400 million refinancing of its office and retail property at 640 Fifth Ave. in Midtown, the firm announced this week.
The company’s new loan on the property is smaller and has a higher interest rate than its prior one, a sign that the borrowing environment for office landlords continues to be rough. It has a fixed interest rate of about 7.5% and matures in July 2029, according to Vornado. The company did not disclose the lenders.
Vornado sold a minority stake in its Times Square and Fifth Avenue retail portfolio, which includes 640 Fifth Ave., to a joint venture led by the real estate firm Crown Acquisitions in a 2019 deal that valued the assets at roughly $5.6 billion. Crown Acquisitions consists of sovereign pension and wealth funds that include the Qatar Investment Authority.
The Bank of China provided a $500 million loan for the properties at the time. The loan had a roughly 1.1% interest rate and was scheduled to mature in August, according to Vornado. The firm said it had fully guaranteed the loan and paid down $100 million of it.
The 640 Fifth Ave. property, located across the street from Rockefeller Center, stands 22 stories tall and spans 315,000 square feet, according to commercial real estate database CoStar. Vornado redeveloped it in 2005 to maximize its air rights by adding a glass “jewel box” tower spanning 35,000 square feet.
The office portion of the building is 91.5% occupied, and the retail portion is 96.2% occupied, with major tenants including Fidelity Investments, Abbott Capital Management, Victoria’s Secret and Dyson, according to SEC documents.
Earlier this year Vornado completed a major refinancing with SL Green at 280 Park Ave. The firms landed a new loan for slightly more than $1 billion that matures in 2026 with a floating 7% interest rate, the same rate as the loan scheduled to mature in September.
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Eddie Small , 2024-06-13 18:05:21
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