Vornado Realty Trust has acquired a 49% interest in Park Avenue Plaza, a prime Manhattan office tower, from Fisher Brothers, which will remain a partner in the property. The acquisition price implies a gross valuation of US$1.1 billion, or US$950 per square foot, at a discount to estimated replacement cost. The tower is 99% occupied by blue-chip tenants with an 11-year weighted-average lease term and rents described as substantially below market, offering potential for lease mark-ups over time. Vornado's share of the existing US$575 million, 2.99% fixed-rate loan maturing in November 2031 adds long-dated, low-coupon financing to its balance sheet. The deal reinforces Vornado's focus on premium Midtown assets and its cluster of Plaza District holdings, including 350 Park Avenue directly across the street, which may create a differentiated offering for large occupiers.
Vornado Realty TrustFisher Brothers sold a 49% stake, implying a valuation for the property, but the article does not specify the financial impact on Fisher Brothers.