Vornado Realty Trust (NYSE:VNO) announced it has completed its previously announced acquisition of a 49% interest in Park Avenue Plaza, a trophy Class A office tower in Midtown Manhattan, at a gross valuation of $1.1 billion.

Key Highlights

  • Vornado acquired a 49% interest in Park Avenue Plaza at a $1.1 billion gross valuation.
  • The property was valued at $950 per square foot, a discount to replacement cost.
  • Park Avenue Plaza is 99% leased with an 11-year weighted-average lease term.
  • Vornado's stake is subject to its share of a $575 million loan at a fixed 2.99% rate maturing in 2031.

Vornado Realty Trust (NYSE:VNO) announced it has completed its previously announced acquisition of a 49% interest in Park Avenue Plaza, a 45-story, 1.2 million rentable square foot office building located at 55 East 52nd Street in Manhattan.

The property was acquired at a gross valuation of $1.1 billion, equivalent to approximately $950 per square foot, which the company described as a significant discount to replacement cost. Park Avenue Plaza is a Class A trophy office building co-owned with Fisher Brothers, featuring protected Park Avenue views and occupying the full through-block between East 52nd and East 53rd Street.

The building sits directly across 52nd Street from Vornado's 350 Park Avenue development, adding a strategically located asset to the company's existing footprint in the Plaza District.

According to the announcement, Park Avenue Plaza is 99% occupied by blue-chip tenants, with an 11-year weighted-average lease term and rents that remain substantially below current market levels, pointing to potential future upside as leases roll over.

Vornado's acquisition of its 49% interest comes subject to its proportional share of a $575 million loan encumbering the property. The loan carries a fixed interest rate of 2.99% and matures in November 2031, providing long-term financing certainty for the asset.

Fisher Brothers retains its current 51% ownership interest in Park Avenue Plaza and will continue to manage and lease the property, with Vornado and Fisher Brothers sharing joint control over major decisions affecting the asset.

The acquisition complements Vornado's broader portfolio of Plaza District holdings, which includes 280 Park Avenue, 350 Park Avenue, 595 Madison Avenue, 623 Fifth Avenue, 640 Fifth Avenue, 689 Fifth Avenue, 3 East 54th Street, and 1290 Avenue of the Americas, reinforcing the company's concentration of premium office assets in one of Manhattan's most sought-after office corridors.

Vornado Realty Trust operates as a fully-integrated equity real estate investment trust, with a focus on premier office and retail properties concentrated primarily in the New York metropolitan area.