NEW YORK CITY—Vornado Realty Trust—in partnership with Crown Acquisitions—has entered into an agreement to acquire the retail condominium of the St. Regis Hotel and the adjacent retail townhouse for approximately $700 million. The property has 100 feet of frontage on Fifth avenue, on the Southeast corner of 55th street. Vornado also owns 689 Fifth Avenue on the same block.
The property's tenants include the Gucci division of Kering, which holds 17,100 square feet for its Bottega Veneta brand through January 2016; and LVMH, which has 7,600 square feet for its DeBeers brand through January 2019.
Vornado will own between 67% and 80% of the property, with Crown owning the balance. The GAAP yield on the transaction is estimated at over 4%. The final ownership percentages will be based on the amount of debt financing put on the property and Crown's short-term option to invest additional capital. The purchase is expected to close by early fourth quarter of this year, subject to customary closing conditions.
Vornado's Manhattan street retail portfolio consists of 2.8 million square feet in 63 properties with annual EBITDA of over $310 million. The company declined a GlobSt.com request for comment.
Vornado Realty Trust is an equity REIT. Crown is a New York based family owned real estate company.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
