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NEW YORK CITY-In its second major retail acquisition in less than two weeks, Vornado Realty Trust acquired the 17,000-sf retail condominium portion of the former Westbury Hotel for $113 million. The blockfront at Madison Avenue between 69th and 70th streets is currently 100% occupied. Luxury retailers Cartier, Chloe and Gucci have leases that expire in 2018. Sonnenblick-Goldman served as the financial advisor to both the buyer and the seller. Managing director David Schaiman is handling the transaction.
"This is prime, prime, prime retail space," says Faith Hope Consolo, chairman, retail leasing and sales division for Prudential Douglas Elliman Real Estate. "Space like this very rarely comes to the market." She said the pricing was comparable to what's available in the retail marketplace. "That's the market. Rents there are going at $850 or $900 per sf."
Though the leases are not scheduled to expire for more than 10 years, Consolo says she expects there might be some movement. "Madison Avenue has gone from the gold coast to the jewel coast. This would be a dream location for a luxury European jeweler.
Just yesterday, Vornado Realty LP, the operating partnership of Vornado Realty Trust said it would sell $500 million aggregate principal amount of 3.875% exchangeable senior debentures due in 2025. Net proceeds are expected to be approximately $490 million and used "for working capital and other corporate purposes." For additional information, go to Vornado to Launch $500M Public Offering.
And last week, Vornado and two partners were the winning bidders for the Toys 'R' Us and Babies 'R' Us chains for $6.6 billion. For additional information, go to REIT and Equity Partners Buy Toys 'R' Us for Nearly $7B.
The purchase, which is expected to close in the second quarter, is subject to customary closing conditions. Vornado is not commenting beyond issuing a press release.
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