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Vornado Closes Refinancing of One Park Avenue Worth $300M

Zacks Equity Research
Updated

Vornado Realty Trust VNO announced the completion of refinancing of One Park Avenue worth $300 million, through its 55% owned joint venture (“JV”). The financing is likely to further enhance the financial capacity of this NY-based real estate investment trust (“REIT”).

The loan taken for One Park Avenue, a 947,000 square foot office building, located in Manhattan will mature in Mar 2021 and bear London interbank offered rate (“LIBOR”) plus 1.75%. Currently, the rate of interest on this loan is 2.19%.

Vornado is the owner and manager of commercial real estate in the United States, focusing mainly on New York City and Washington D.C. areas. The company boasts a robust financial position. As of Dec 31, 2015, Vornado had $4.5 billion of liquidity, which included $2 billion of cash and marketable securities and outstanding revolving credit facility worth 2.5 billion. Moreover, the company holds more than 13 billion of highest quality unencumbered assets.

Vornado reported funds from operation (“FFO”) per share of $1.37 for fourth-quarter 2015, comfortably beating the Zacks Consensus Estimate by 8 cents. The figure also came in higher than the prior-year tally of $1.22 per share. Vornado currently carries a Zacks Rank #3 (Hold).

Investors interested in the REIT industry may consider better-ranked stocks like DCT Industrial Trust Inc. DCT, CoreSite Realty Corporation COR and Digital Realty Trust Inc. DLR. Each of these stocks holds a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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VORNADO RLTY TR (VNO): Free Stock Analysis Report
 
DIGITAL RLTY TR (DLR): Free Stock Analysis Report
 
DCT INDUSTRIAL (DCT): Free Stock Analysis Report
 
CORESITE REALTY (COR): Free Stock Analysis Report
 
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Zacks Investment Research