Vornado Completes $950 Million Refinancing of 1290 Avenue of the Americas

Rhea-AI Summary

Vornado Realty Trust (NYSE: VNO) has successfully refinanced a $950 million loan for its 2.1 million square foot office building at 1290 Avenue of the Americas. The new interest-only loan has a rate of LIBOR plus 1.51%, which is currently 1.60%, for the first five years, with annual increases of 0.25% in years six and seven. The loan matures in November 2028, replacing a previous fixed-rate loan of 3.34% due in November 2022. Vornado holds a 70% stake in the property and retains full decision-making authority.

Positive

• Successfully refinanced $950 million loan at a lower initial interest rate of LIBOR + 1.51%.
• Extended maturity date to November 2028, providing more time for financial management.

Negative

• Initial interest rate is variable and could increase in subsequent years, impacting cash flow.
• Risks from ongoing COVID-19 pandemic affecting real estate performance and tenant stability.

NEW YORK, Nov. 16, 2021 (GLOBE NEWSWIRE) --

VORNADO REALTY TRUST (NYSE: VNO) announced today that it has completed a $950 million refinancing of 1290 Avenue of the Americas, a 2.1 million square foot Class A Manhattan office building. The interest only loan bears a rate of LIBOR plus 1.51% (currently 1.60%) in years one to five, increasing .25% in both years six and seven. The loan matures in November 2028, as fully extended.

The loan replaces the previous $950 million loan that bore interest at a fixed rate of 3.34% and was scheduled to mature in November 2022.

Vornado owns a 70% controlling interest in the partnership that owns the building 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, current and future variants, the efficacy and durability of vaccines against the variants and the potential for increased government restrictions, which continue to be 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 recent refinancing deal did Vornado Realty Trust announce?

Vornado Realty Trust announced a $950 million refinancing for 1290 Avenue of the Americas.

What is the interest rate on the new loan for Vornado's office building?

The new loan has an interest rate of LIBOR plus 1.51%, currently 1.60%, for the first five years.

When does the new loan for Vornado Realty Trust mature?

The new loan matures in November 2028.

How does the new loan's interest rate compare to the previous loan?

The previous loan had a fixed interest rate of 3.34%, while the new loan has a lower variable rate.