Vornado Realty Trust
), a leading real estate investment trust (REIT), has recently
completed a mortgage loan refinancing transaction of a 206,000
square foot Manhattan retail property titled '4 Union Square
South'. The seven-year refinanced loan worth $120 million bears
interest at LIBOR plus 2.15%.
BOSTON PPTYS (BXP): Free Stock Analysis
VORNADO RLTY TR (VNO): Free Stock Analysis
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The new mortgage loan has a 30-year amortization schedule
beginning in the third year. Besides reducing debt through the
repayment of the existing mortgage loan, the transaction
increased the liquidity of the company amid a challenging
macroeconomic environment. Vornado Realty received net proceeds
of approximately $42 million after repaying the existing loan and
closing costs of the transaction.
Over the past few quarters, the company has continuously
increased its cash reserves through asset sale transactions.
During third quarter 2012, Vornado Realty entered into agreements
to sell the Washington Design Center, the Boston Design Center
and the Canadian Trade Shows, for a total of $175.0 million in
cash. In addition, Vornado completed the sale of 409 Third Street
S.W., a 409,000 square foot office building in Washington, DC,
for $200.0 million in cash.
Subsequent to the quarter-end, the company entered into an
agreement to sell three office buildings (494,000 square feet) in
suburban Fairfax County, Virginia, for $126.0 million, and the
Green Acres Mall in Valley Stream, New York, for $500.0 million.
New York-based Vornado Realty acquires, owns and leases office
properties, retail space and temperature-controlled logistics and
refrigerated warehouses. Besides its properties, the company also
has investments in other REITs, industrial buildings, retail
assets, and Toys 'R' Us.
Vornado Realty has a strong asset portfolio in two of the best
long-term office markets in the U.S. - New York City and
Washington DC. This provides the company with a competitive
advantage to continually increase rents. The company also has a
healthy balance sheet and adequate liquidity.
We maintain our long-term Neutral rating on Vornado Realty, which
currently has a Zacks #2 Rank that translates into a short-term
Buy recommendation. We also have a Neutral recommendation and a
Zacks #3 Rank (short-term Hold recommendation) for
Boston Properties Inc.
), a competitor of Vornado Realty.