Vornado Completes $1.2 Billion Refinancing of 555 California Street

Rhea-AI Summary

Vornado Realty Trust (NYSE: VNO) has successfully refinanced 555 California Street, a premier three-building office campus in San Francisco, totaling $1.2 billion. The new interest-only loan features a rate of LIBOR plus 1.93% for the first five years, increasing to LIBOR plus 2.43% by year seven, maturing in May 2028. Vornado's share of the net proceeds is approximately $454 million, replacing a previous $533 million loan at a fixed rate of 5.10%. The company maintains a 70% controlling interest in the partnership owning the buildings.

Positive

• Successful refinancing of $1.2 billion lowers interest rates compared to previous loan.
• Net proceeds of approximately $454 million improve liquidity.
• Fixed interest rate of 2.26% for the first three years reduces financial risk.

Negative

• Ongoing uncertainties related to the COVID-19 pandemic could impact operational performance.
• Previous loan had a significantly higher interest rate (5.10%).

NEW YORK, May 10, 2021 (GLOBE NEWSWIRE) -- VORNADO REALTY TRUST (NYSE: VNO) announced today that it has completed a $1.2 billion refinancing of 555 California Street, a three building 1.8 million square foot trophy office campus in San Francisco. The interest only loan bears a rate of LIBOR plus 1.93% in years one through five, LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2028, as fully extended. Vornado swapped its share of the loan for the first three years to a fixed rate of 2.26%.

The loan replaces the previous $533 million loan that bore interest at a fixed rate of 5.10% and was scheduled to mature in September 2021.

Vornado’s share of the net proceeds was approximately $454 million.

Vornado owns a 70% controlling interest in the partnership that owns the buildings and has sole decision-making authority.

Vornado Realty Trust is a fully-integrated equity real estate investment trust.

CONTACT

Thomas Sanelli
(212) 894-7000

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2020. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors. Currently, one of the most significant factors is the ongoing adverse effect of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows, operating performance and the effect it has had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general. The extent of the impact of the COVID-19 pandemic will depend on future developments, including the duration of the pandemic, which are highly uncertain at this time but that impact could be material. Moreover, you are cautioned that the COVID-19 pandemic will heighten many of the risks identified in "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2020.

FAQ

What is the refinancing amount for Vornado Realty Trust's 555 California Street?

Vornado Realty Trust completed a refinancing of $1.2 billion for 555 California Street.

What is the interest rate on the new loan for Vornado Realty Trust?

The new loan has a rate of LIBOR plus 1.93% in the first five years, increasing in subsequent years.

What are the net proceeds from the refinancing for Vornado Realty Trust?

Vornado's share of the net proceeds is approximately $454 million.

When does the new loan for Vornado Realty Trust mature?

The new loan matures in May 2028.

What was the interest rate on the previous loan for Vornado Realty Trust?

The previous loan had a fixed interest rate of 5.10%.