(Save the date: RealShare New York comes to the Grand Hyatt, New York, NY, October 9.)
NEW YORK CITY-After redefining its real estate strategy to sharpen its focus on core markets in Manhattan and Washington, DC earlier in the year, publicly-traded REIT Vornado Realty Trust has issued $300 million in preferred stock at a price of $25 per share, SEC filings show.
Bank of America Merrill Lynch, Citigroup, Morgan Stanley, UBS Investment Bank and Wells Fargo acted as joint book-running managers on the transaction. According to a statement from the REIT, the company will use the net proceeds for general business purposes, which includes the redemption or repurchase of outstanding preferred stock and units.
Following the move, ratings agency Fitch Ratings assigned a credit rating of ‘BB+’ for the stock issuance, citing Vornado’s credit strengths, including “strong access to capital, exceptional unencumbered assets to unsecured debt and the maintenance of leverage appropriate for the rating category, a high-quality portfolio of properties, manageable lease maturities and granular tenant base.”
The rating was also influenced by the REIT’s acquisition strategy of prime New York City retail and the disposition of non-core assets. At the end of the 2011, Vornado sold 350 West Mart Center – part of Chicago’s Merchandise Mart – to San Francisco-based Shorenstein Properties LLC for approximately $228 million. And last week, the REIT made post-Fourth of July fireworks after purchasing a 114,000-square-foot retail space at 666 Fifth Ave. from the Kushner Cos., Crown Acquisitions and the Carlyle Group for $707 million. [Late last year, the REIT entered a joint venture with Kushner and took a 49.5% stake in the office portion of the 41-story Midtown trophy]. In addition, Vornado also agreed to sell the Washington Design Center, the Boston Design Center, the L.A. Mart and Canadian Trade Shows.
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