Following through on strategic plans for its portfolio, Vornado Realty Trust revealed that it has entered into a $228 million deal to sell the 1.2 million-square-foot 350 West Mart Center office building in Chicago and signed a separate agreement to fork over ownership of four mixed-use retail assets in Manhattan for $78 million.
Theyve articulated to the investment community that they were going to simplify their business a bit and focus on their core office and retail, on owning properties in Manhattan and D.C., and one of the businesses that they specified that they were going to de-emphasize was the merchandise mart business, Sheila McGrath, senior vice president of equity REIT research with global investment bank Keefe, Bruyette Woods, told Commercial Property Executive.
Vornado had owned the 34-year-old former apparel mart building since 1998, when it acquired a $630 million portfolio that included Chicagos famed Merchandise Mart from the iconic Kennedy Family. Located along the Chicago River, the 25-story, LEED-certified tower is home to the likes of the Chicago Sun-Times, Comcast SportsNet, the Illinois Institute of Art-Chicago and Ogilvy Public Relations.
Details about the four Manhattan mixed-use retail properties Vornado has agreed to sell are not currently being disclosed; however, the disposition of the assets, despite their location in a coveted market, dovetails with the REITs current strategy. I just spoke to them this morning and they did say that these were non-core properties and that they have a lot more opportunity in their retail portfolio, in their street retail, McGrath said. So theyre not de-emphasizing street retail in New York, these were just non-core.
All of the assets turned heads in the investment community when they came up for grabs. I understand there were a number of bids at the level that they sold. And at a little bit lower level, there were even more bids. So there was a decent amount of interest.
Vornado expects to receive net cash proceeds totaling approximately $290 million on the Chicago and Manhattan transactions, for a net gain of roughly $55 million. I think the sales were a good move for them in terms of increasing liquidity, which they have a lot of at this point, and de-emphasizing their merchandise mart business, McGrath said.
The transactions are on track to close by the first quarter 2012.
Similar Posts:
- Chevron Pays $340 Million for 1.3-Million-SF Houston Office Building
- Saul Takes Three Grocery-Anchored Shopping Centers for $168.5M
- Gaylord Plans Multi-Million-Dollar Resort in Denver Suburb
- Condo opportunity fund capitalizes on foreign investments in South Florida
- JW Marriott Marquis Hotel Dubai Set to Open in 2012
