Vornado Completes $1.8B Purchase

NEWARK–Vornado Realty Trust has closed on its acquisition of 70% of trophy office buildings on both the East and West coasts, for $1.8 billion. The 42-story, two-million-sf, fully-occupied 1290 Avenue of the Americas spans an entire city block between 51st and 52nd streets in Midtown Manhattan. The Bank of American Center in San Francisco is a 1.8-million, 94%-occupied tower at 555 California St.

As GlobeSt.com previously reported, Vornado is buying the shares of a group of foreign companies that own the 1% sole general partnership interest as well as 69% in limited partnership interest. They are held through American entities: Apollo Real Estate for the New York building and Hudson Waterfront Associates for San Francisco.

The purchase price consists of $1.01 billion in cash and $797 million in existing debt. Vornado executives estimate a price of $775 per sf for 1290 Ave. of the Americas and $575 per sf for 555 California St. At those rates the New York building is valued at $1.55 billion and the San Francisco building at $1.035 billion. Vornado’s 70% share is $1.085 billion for the New York building, and $724.5 million for the San Francisco building.