VORNADO REALTY TRUST (NYSE:VNO) announced today that it has acquired a
58.75% interest in Independence Plaza, a 1,328 unit residential complex
in the Tribeca submarket of Manhattan which has 54,500 square feet of
retail space and 550 parking spaces.
As a first step toward this transaction, in 2011, Vornado acquired a 51%
interest in the subordinated debt of Independence Plaza for $45 million
and a warrant to purchase 25% of the equity for $1 million. The current
transaction values the property at $844.8 million; the property is
currently encumbered by a $329.2 million mortgage. Vornado acquired its
58.75% interest in the property as follows: (i) buying one of the equity
partners 33.75% interest for $160 million, (ii) exercising its warrant
for 25%, and (iii) contributing the appreciated value of its interest in
the subordinated debt as preferred equity.
As a result of contributing the debt for preferred equity and exercising
its warrant, Vornado recognized a $100 million net gain for financial
statement purposes in the fourth quarter.
Vornado and Stellar Management, the other equity partner, expect to
refinance the mortgage in the first quarter of 2013, substantially
decreasing their cash investment.
Vornado manages the retail space at the property and Stellar Management
manages the residential.
Vornado Realty Trust is a fully integrated equity real estate investment
trust.
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.
Such factors include, among others, risks associated with the timing of
and costs associated with property improvements, financing commitments
and general competitive factors.
