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Vornado Tidies Up “Fortress” Balance Sheet with Warner Building Refi

WASHINGTON, DC—Vornado Realty Trust is a REIT that routinely describes itself as having “a fortress balance sheet with modest leverage”.

By Erika Morphy | erikamorphy | | Updated on May 12, 2016
The Warner Building The Warner Building
WASHINGTON, DC—Vornado Realty Trust has refinanced the $293 million debt on The Warner Building, located at 1299 Pennsylvania Ave., NW, which the REIT owns in a 55% JV. It secured a $273 million, seven-year loan for the 621,000-square foot office that matures in June 2023 and has a fixed rate of 3.65%. In addition, the loan is interest only for the first two years and amortizes based on a 30-year schedule beginning in year three. The previous mortgage had a loan with a 6.26% interest rate. Vornado is a REIT that routinely describes itself as having “a fortress balance sheet with modest leverage”. It keeps its maturities well-staggered as quick run down of its capital markets activity for the first quarter of 2016 reveals. In February, it completed a $700 million refinancing of 770 Broadway, a 1.158 million-square-foot Manhattan office building. In March, it completed a $300 million refinancing of 1 Park Ave., a 947,000-square-foot Manhattan office building in which it owns a 55% interest. And now it just refinanced the Warner Building, leaving it only two debt maturities scheduled for 2016. These are a $550 million loan on its Merchandise Mart building in Chicago, which matures in December 2016 and $361 million at 280 Park Ave. Vornado is well along in refinancing both loans, CEO Steve Roth said during the first quarter earnings call.

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