Vornado Buys Majority of Manhattan Residential Complex
Vornado Realty Trust (VNO), the No. 3 U.S real estate investment trust by market value, purchased a 59 percent interest in Independence Plaza, a 1,328-unit residential complex in lower Manhattan’s Tribeca neighborhood.
The deal values the property, which includes 54,500 square feet (5,063 square meters) of retail space and 550 parking spaces, at $844.8 million, Paramus, New Jersey-based Vornado said today in a statement.
The company’s move to control Independence Plaza began last year, when it acquired a 51 percent stake in the property’s subordinated debt for $45 million and a warrant to buy 25 percent of its equity for $1 million, according to the statement. Vornado exercised the warrant and acquired 34 percent more from another partner for $160 million.
The property is encumbered by a $329.2 million mortgage, the company said. Vornado and Stellar Management, the other equity partner, plan to refinance the mortgage in the first quarter of 2013, shrinking their cash investment.
Vornado, the largest U.S. REIT after Simon Property Group Inc. (SPG) and General Growth Properties Inc. (GGP), said it will have a $100 million fourth-quarter gain from the deal as a result of exchanging debt for equity and exercising the warrant.
Located just south of Citigroup Inc.’s trading complex on Greenwich Street, Independence Plaza has townhouses and three 39-story apartment towers.
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