Vornado Realty TrustVNO has closed the acquisition of Old Navy Store in Penn Plaza District. The property was bought for around $355 million. Addition of this retail property further solidifies the company's retail base in the New York region.
This property is located at 150 West 34th Street in New York, comprising 78,000 square feet of space. The lease to Old Navy runs through May 2019. It also comes with 226,000 square feet of additional zoning air rights. Vornado closed a $205 million financing of the property at closing.
We expect the acquired property, located at an upscale region which experiences rent growth, will aid the company's top-line going forward. The other retailer, Macy's Inc. M , also witnesses growing sales in the region.
In fact, on the leasing front, the New York business continues to put up a solid performance with growth in occupancy and same-store earnings before interest, tax, depreciation and amortization ("EBITDA").
NY-based Vornado, a real estate investment trust ("REIT"), is the owner and manager of commercial real estate in the U.S., with a portfolio that is mainly located in the New York City and Washington D.C. areas.
In January, Vornado completed the spin-off of its shopping center business into a publicly traded REIT named Urban Edge Properties. The move left the company with high-quality office properties and retail assets in Washington and Manhattan on which it can exclusively focus now.
Vornado currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Hersha Hospitality Trust HT and Liberty Property Trust LPT . All these stocks hold a Zacks Rank #2 (Buy).
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