Vornado Seals $950M CMBS Loan for Trophy Tower

1290 Avenue of the Americas

Vornado Realty Trust has completed the $950 million refinancing of 1290 Avenue of the Americas, a 2.1 million-square-foot Class A office building in Midtown Manhattan’s Plaza District. The investment trust has a 70 percent majority interest in the 43-story property, while The Trump Organization holds the remaining stake.

The seven-year, interest only CMBS loan has a LIBOR plus 1.51 percent rate in the first five years, which increases by .25 percent in the last two years. The current loan refinances a former $350 million note with a 3.34 percent fixed rate, which bore a maturity date of November 2022.

The refinancing was first reported by Bloomberg in early November, based on a report released by Kroll Bond Rating Agency LLC. The non-recourse, first lien mortgage loan is originated by JPMorgan Chase Bank (50.0 percent), Citi Real Estate Funding Inc. (20.0 percent), Goldman Sachs Bank USA (20.0 percent) and Bank of Montreal (10.0 percent).

Amid uncertainties brought on by the global health crisis, in June 2020 Vornado announced that it was exploring the potential recapitalization of the trophy tower, along with 555 California Street in San Francisco. The Trump Organization held a 30 percent interest in both assets.

A trophy asset

Vornado acquired 1290 Avenue of the Americas in 2007, according to CommercialEdge data. The company bought the majority stake from Hudson Waterfront Associates as part of a $1.8 billion portfolio transaction. U.S. Bank backed the deal with a $950 million loan.

The KBRA report shows that as of November 2021, the property was 98 percent leased to a roster of 25 tenants. The three largest tenants include Axa Equitable Life Insurance, responsible of 25.4 percent of total base rent, Neuberger Berman with 19.9 percent and Cushman & Wakefield Inc. with 9.4 percent. Since 2010, the property held an annual occupancy rate of 97.6 percent.

Rising on a 2-acre site between Radio City Music Hall and the Museum of Modern Art, 1290 Avenue of the Americas was completed in 1963. Designed by architectural studio Emery Roth & Sons, the LEED Silver certified building offers floorplates ranging between 25,400 and 105,000 square feet. Since 2010, the tower underwent gradual renovations amounting to $360 million, including the overhaul of the lobby and common areas, as well as other mechanical upgrades.