No. of Recommendations: 2
From Reuters:

Vornado Realty Trust (VNO.N) and SL Green Realty Corp (SLG.N), two large real estate investment trusts (REITs), said on Wednesday they have formed a joint venture to hold $400 million in debt on one of the most expensive office buildings in Manhattan.

Broadway Partners and Middle East money manager Investcorp paid $1.278 billion in 2007 for the building at 280 Park Avenue. It was the fourth-highest price paid for an office building that year, according to Real Estate Alert.

It consists of a 31-story tower, a 43-story tower and a 14-story connecting building and is 1.237 million square feet.

The owners have struggled with rising vacancies. Deutsche Bank left after its lease on 338,700 square feet expired last month. The National Football League's lease on 205,000 square feet of space is due to expire at the end of February 2012. That could leave the office complex 45 percent empty.

Investment bank EdgeRock Realty Advisors has been representing Broadway Partners in its search for investors.

Broadway and Investcorp financed their purchase with $1.125 billion of debt, including a $440 million senior mortgage. The rest of the debt was sliced into six pieces. Vornado held the most junior piece and SL Green held four pieces. A group owns the remaining debt.

Under the terms of the joint venture, Vornado paid SL Green $111 million and assumed $15 million of SL Green's debt position, Vornado and SL Green said in a statement.

Broadway Partners has encountered problems with other properties. In 2009, it lost the John Hancock Tower, Boston's tallest building, in a foreclosure auction. Broadway had paid about $1.3 billion for the property in 2006. Mortimer Zuckerman's Boston Properties Inc (BXP.N) bought it in 2010 for $930 million.
Print the post  


Related Boards
Real Estate Investing
This is a great board for Real Estate other than REITs.

Buying & Selling a Home
Get your personal advice about mortgages, agents, etc. here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.