Steve Roth’s Vornado Realty Trust is looking to sell another office building as it trims outdated portions of its portfolio.
The REIT’s 1980s-era office property at 40 Fulton Street in the Financial District is for sale, marketing materials show. The company aims to get somewhere between $130 million and $140 million for the 29-story building, according to a source familiar with the matter.
A representative for Vornado declined to comment. But on the company’s first-quarter earnings call this week, president Michael Franco said the landlord plans to sell $750 million worth of property this year as it prunes its portfolio.
With workers still reluctant to return to their offices, Vornado is concentrating on renovating and developing office buildings in up-and-coming areas, like the one around Penn Station, that are more likely to attract tenants in the hybrid work era. Last week, it struck a deal to sell a 500,000-square-foot office building at 33-00 Northern Boulevard in Long Island City for $173 million.
The building at 40 Fulton Street was developed in 1987 and sits a block west of Water Street in a dreary part of the Financial District. Franco said these are not the types of buildings that enjoy the most demand from tenants.
“It’s a fine building, but that’s not an asset that we think is consistent, where we want to own in five [or] 10 years,” he said on the earnings call.
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New York
Vornado selling Queens office property for $173M
Vornado bought the 250,000-square-foot building in 1998 along with the ground lease on the 46-story office tower at 888 Seventh Avenue in Midtown. It paid $154.5 million for the two properties, according to a news report at the time.
In 2019, the company completed a $15 million renovation at the Fulton Street building, which is now 80 percent leased, according to marketing materials from Newmark, where a team led by Brett Siegel and Evan Layne is handling the sales process.
The building’s largest tenant is Fortune Media, publisher of Fortune magazine, which takes up about 20 percent of its rentable area on a lease that runs through 2030. The landlord has leased more than 158,000 square feet — or roughly 63 percent of the building — since the 2019 renovation.
Vornado is also considering selling a ground lease at the property but holding onto the real estate underneath.