Vornado Buys Two Malls

HICKSVILLE, NY-Vornado Realty Trust shelled out $153 million for the 1.2-million-sf Broadway Mall here.. The REIT also entered into an option agreement for the 1.4-million-sf Springfield Mall in Springfield, VA, which it plans to redevelop, reposition and retenant.

Broadway Mall is anchored by Ikea, Target, Macy’s and a Multiplex Cinema. The agreement for the Long Island-area mall includes $95.8 million of existing debt.This purchase is expected to close in the fourth quarter of 2005.

Springfield Mall is anchored by Macy’s, JC Penney and Target. Vornado’s option becomes exercisable upon the passing of one of the existing principals of the selling entity and may be deferred at the company’s election through November 2012. The REIT paid $36 million for the option and upon exercise of the option will pay $80 million and acquire the Mall, The deal is subject to the existing mortgage which is presently $181 million and will be amortized to $149 million in 2013 when it matures. During the option period Vornado will manage the sitel and receive the Malls’ net cash flow. Vornado also has a 2.5% partner in this transaction. The acquisition of the option is expected to close by the end of the year.