Search
 

Experts: Recent Deals Reflect Coming Slowdown

NEW YORK CITY-Vornado, in the final days of WTC negotiations, lands on S&P's negative CreditWatch while a development is abandoned and the Nasdaq plunges below 2,000. Industry veterans try to make sense of it all.

By Betsy Kraat | Updated on March 13, 2001

NEW YORK CITY-The party might be over, and recent deals–along with yesterday’s stock-market plunge–may signal that the much-touted downturn is at hand. Last week, as reported by GlobeSt.com, 75% of the interest in the Chrysler Building sold for $300 million and experts said it showed owners were trying to cash in before the market softened. Following this news, the Goldman Sachs Group reneged on its plans to develop an $850 million trading structure at 55 Water St. Now, Vornado is entering the final days of negotiations for the World Trade Center, for which it plans to spend $3.25 billion, and has been put on S&P’s negative CreditWatch. Yesterday (March 12), the Nasdaq composite index hit its lowest mark in two years.

By now it is common knowledge that Vornado Realty Trust secured the winning bid on the World Trade Center, procuring a 99-year lease from the Port Authority of New York and New Jersey for $3.25 billion–a big deal for big money. This Thursday, March 15, is the official final day of the negotiation process for that bid. At the same time, Vornado is facing tax disputes and troubled credit because of the pricey purchase.

Standard & Poor’s has placed Vornado Realty Trust and Vornado Realty LP on CreditWatch with negative implications, affecting securities valued at $450 million. At the time of the rating Gregory J. Whyte of Morgan Stanley Dean Witter told GlobeSt.com, “Does this mean Vornado does not have the capacity to close on the deal–absolutely not. Does it mean that if Vornado can’t convince the S&P to re-evaluate them the cost of the transaction will go up? Maybe, but that’s about it.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.