Vornado Realty Trust said it has agreed to acquire Canada Pension Plan Investment Board’s (CPP Investments) 45% interest in One Park Avenue, an office building in Manhattan, increasing its ownership interest to 100%.
The purchase price values the property at $875 million, said Vornado.
The consideration to CPP Investments is approximately $158 million in cash plus Vornado is assuming CPP Investments’ share of the existing debt.
The property is currently encumbered by $525 million of debt, which bears interest at a rate of LIBOR plus 1.11% (currently 1.20%) and matures in March 2026, as fully extended.
One Park Avenue is a 943,000 square foot Manhattan office building that is 67% leased to New York University (S&P: AA-) through May 2050.
Vornado originally acquired an interest in the property in March 2011 at a $394 million valuation and recapitalized the property with CPP Investments in June 2014 at a $560 million valuation.
The purchase is expected to close in the third quarter of 2021, subject to customary closing conditions.
Vornado Realty Trust is a fully-integrated equity real estate investment trust.