Vornado’s Retail JV Completes $400 Million Refinancing of 640 Fifth Avenue

Rhea-AI Summary

Vornado Realty Trust (NYSE: VNO) announced the completion of a $400 million refinancing for 640 Fifth Avenue, a 315,000 square foot office and retail property in Manhattan. The new loan is interest-only, non-recourse, with a fixed rate of 7.47%, and matures in July 2029. This replaces a previous $500 million loan, fully guaranteed by Vornado, which had an interest rate of SOFR plus 1.11% and was set to mature in August 2024. The new financial arrangement reduces Vornado's loan obligation by $100 million.

Positive

• Refinancing of $400 million loan for 640 Fifth Avenue completed.
• New loan matures in July 2029, providing longer financial stability.
• Interest-only, non-recourse loan at a fixed rate of 7.47%.
• Reduction of loan obligation by $100 million.

Negative

• The new loan carries a higher interest rate of 7.47% compared to the previous loan's SOFR plus 1.11%.
• Vornado had to reduce the loan amount by $100 million, indicating potential liquidity constraints.

News Market Reaction

-1.37%

1 alert

-1.37% News Effect

On the day this news was published, VNO declined 1.37%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

NEW YORK, June 10, 2024 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE:VNO) announced today that its 52% owned street retail joint venture has completed a $400 million refinancing of 640 Fifth Avenue, a 315,000 square foot Manhattan office and retail property. The interest only, non–recourse loan carries a fixed rate of 7.47% and matures in July 2029.

The street retail joint venture paid down by $100 million the prior $500 million loan, which was fully guaranteed by Vornado, bore interest at SOFR plus 1.11% and was scheduled to mature in August 2024.

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

CONTACT

Thomas J. 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. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. 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, 2023. Currently, some of the factors are the increased interest rates and inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have 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.

FAQ

What recent financing did Vornado complete?

Vornado completed a $400 million refinancing for 640 Fifth Avenue.

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

The new loan has a fixed interest rate of 7.47%.

When does Vornado's new loan mature?

The new loan matures in July 2029.

What was the previous loan amount for 640 Fifth Avenue?

The previous loan amount was $500 million.

How much did Vornado reduce its loan obligation by?

Vornado reduced its loan obligation by $100 million.