Vornado Realty Trust announced that it has completed the previously announced acquisition of a 49% ownership interest in Park Avenue Plaza, expanding its presence in Manhattan’s Plaza District.
The transaction values the property at approximately $1.1 billion, or about $950 per square foot, which the company described as a significant discount to replacement cost. Park Avenue Plaza is a 45 story, 1.2 million rentable square foot Class A office tower located at 55 East 52nd Street. The property, which is co-owned by Fisher Brothers, spans the full block between East 52nd and East 53rd Streets and offers protected Park Avenue views. It is also situated directly across East 52nd Street from Vornado’s planned 350 Park Avenue development.
According to Vornado, the building is currently 99% occupied by blue-chip tenants and has an 11 year weighted average lease term. The company noted that rental rates are substantially below current market levels, providing potential upside over time.
Vornado acquired its interest subject to its proportionate share of the property’s existing $575 million loan. The debt carries a fixed interest rate of 2.99% and matures in November 2031.
Fisher Brothers will retain its 51% ownership stake and will continue to oversee management and leasing operations for the property. The two companies will jointly control major decisions related to the asset.
The acquisition adds another prominent office property to Vornado’s Plaza District portfolio, which includes 280 Park Avenue, 350 Park Avenue, 595 Madison Avenue, 623 Fifth Avenue, 640 Fifth Avenue, 689 Fifth Avenue, 3 East 54th Street, and 1290 Avenue of the Americas.
Vornado Realty Trust is a fully integrated equity real estate investment trust focused on owning and managing office and retail properties.
