Vornado Lands $450M for Manhattan Tower
The existing loan was scheduled to mature in October.
Vornado Realty Trust has obtained a $450 million refinancing loan for PENN 11, a 1.2 million-square-foot office property at 393 Seventh Ave. in Manhattan. The five-year note has a fixed rate of 6.35 percent and is scheduled to mature in August 2030.
Citigroup, BMO Capital Markets and Société Générale co-originated the single-asset, single-borrower CMBS loan, Commercial Observer reported, citing Bloomberg.
Proceeds will retire the outstanding balance of a $500 million note issued by Citibank in 2020, which was slated to mature this October, according to Yardi Research Data. Vornado has already paid off $50 million of that debt.
The century-old PENN 11
Designed by Starrett & van Vleck and completed in 1923, PENN 11 is a 26-story asset with floorplates ranging from 14,711 to 55,109 square feet. Vornado acquired it in 1980 from The Equitable Life Assurance Society of the United States for $30 million, the same data provider shows.
The LEED Gold-certified property houses the New York headquarters of Macy’s and AMC Networks Inc. The latter is the second-largest tenant after Apple, which occupies 460,629 square feet—almost 40 percent of the building’s net rentable area, Morningstar reported. At the end of March, PENN 11 was 96.6 percent leased to 10 tenants.
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Located in Midtown Manhattan, the property is adjacent to Madison Square Garden and Penn Station and equidistant from Chelsea Park and Empire State Building, less than 1 mile away.
The office tower is also 1 mile from another century-old office property, owned by Vornado and The Albanese Organization, that will change hands for $205 million. The deal is scheduled to close in the third quarter of this year.
Manhattan’s office market registered the highest average asking rates in the U.S. as of May, at $68.08 per square foot, according to a recent Yardi Matrix report. The figure was down 4.5 percent year-over-year, yet still more than double the national figure of $33.15. Meanwhile, office vacancy in the borough fell to 15.7 percent, reflecting a 50-basis-point drop in the last 12 months.
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