Vornado Secures $120M for Manhattan Retail

Vornado Realty Trust has secured a $120 million refinancing loan for 4 Union Square South, a 204,000-square-foot retail property in Manhattan. A private lender provided the 10-year note bearing a fixed rate of 5.64 percent, according to Yardi Research Data.

Proceeds retire the existing $120 million loan issued by Wells Fargo Bank in 2018, the same source shows. That note was due to mature this August.

Manhattan’s retail market maintained a steady rhythm in the second quarter of this year, with apparel and food and beverage tenants as activity drivers, according to a recent report by CBRE. June saw average asking rents in the borough rise to $670 per square foot, up 2.0 percent from the previous quarter but down 6.0 percent year-over-year.

A Union Square Park retail property

Vornado acquired 4 Union Square South in 1993 for $17 million. Originally competed in 1971 as a single department store property, the retail center underwent a complete redevelopment under the new ownership, which finalized in 2005. The tenant roster at the six-story property features DSW Shoes, Burlington Coat Factory, Sephora, Five Below and one of New York City’s first Whole Foods Market stores.

Located at the southern end of Union Square Park, between Broadway and Park Avenue South, 4 Union is adjacent to the subway station on the L train, as well as across the street from a Best Buy store. Downtown Manhattan is some 3 miles away.

Street retail in the U.S. is currently on track to making a full recovery from the pandemic, according to CBRE, and foot traffic levels in prime trade areas are expected to surpass pre-2019 levels by the end of the year. Demand for high street retail remains steady but selective, with retailers often waiting years for ideal locations.