Vornado Lands $400M Refi for Manhattan Mixed-Use Tower

June 11, 2024

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The funds retire a $500 million loan from 2019.

Vornado Realty Trust has secured a $400 million refinancing for 640 Fifth Ave., a mixed-use office and retail property in Manhattan spanning 315,000 square feet. The interest-only, non-recourse note has a fixed rate of 7.47 percent, and carries a July 2029 maturity term.

The financing retires a $500 million loan from 2019, originated by Bank of China, according to CommercialEdge data. Fully guaranteed by Vornado, this previous note carried a 3.07 percent fixed rate and was due this June.

Vornado has a 52 percent stake in a joint venture owning multiple commercial properties in Times Square and on the Upper Fifth Avenue. In 2019, the company sold a 45.4 percent ownership stake in the portfolio to Crown Acquisitions, for $1.2 billion.

Completed in 1950, the building at 640 Fifth Ave. underwent a full redevelopment in 2004, designed by Kohn Pedersen Fox. It rises 22 stories, including three stories of retail, with floorplates ranging from 9,200 to 20,000 square feet. It is also LEED certified. Major office tenants include Fidelity Investments and Owl Creek Asset Management, while part of the retail side is occupied by Dyson and Victoria’s Secret.

Located on Fifth Avenue’s upper side, the building is next to Rockefeller Center and St Patrick’s Cathedral. It is also within walking distance of the 5 Av/53 St. subway station, among other public transit options.

Manhattan office market’s performance

As of April, the asking rate in Manhattan clocked in at $69.72, maintaining the borough’s position as the priciest market in the U.S., but marking a 5.8 percent year-over-year drop, according to a recent CommercialEdge report. The vacancy rate also reached 17.6 percent, climbing 80 basis points over 12 months.

In one of Manhattan’s largest recent financing deals, Vornado and its joint venture partner SL Green Realty Corp. secured a two-year extension for a $1.1 billion securitized mortgage for a 1.3 million-square-foot tower in the borough’s Midtown area. The loan was slated to mature in September 2024, and the partners retained the option to further expand the maturity date through 2028.