Vornado Realty Trust’s hunt for liquidity has landed an iconic piece of Manhattan history in its crosshairs.
The firm is weighing its options, including a possible sale, at the Farley Building at 390 9th Avenue, according to Bloomberg. People familiar with the matter told the outlet the early discussions also included the option of putting a mortgage on the property, which doesn’t carry any debt.
The possible sale was first reported by Green Street.
The real estate investment trust has retained Newmark’s Adam Spies and Doug Harmon to weigh its options for the former Post Office building is one possibility.
Vornado didn’t comment to the outlet.
CEO Steven Roth, in the REIT’s second quarter earnings call, alluded to a possible sale of the Farley Building. When asked if the company would consider selling its stake in the property across from Penn Station, Roth hedged by saying Vornado liked the asset, before adding that it “could be an important source of liquidity.”
In recent months, Vornado has been shedding assets and working with lenders to refinance and extend loans.
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Vornado may now be targeting tech tenants at Farley Post Office redevelopment
The anchor tenant at the Farley Building is Meta, which signed a 15-year lease for 730,000 square feet in August 2020, despite the uncertainty amid the pandemic. Mark Zuckerberg’s company scored a discount, agreeing to pay a starting rate of $109 per square foot and saving 9 percent when considering all concessions.
In October 2018, Vornado increased its ownership stake in the 900,000-square-foot redevelopment from 50 percent to 95 percent after buying a large portion of Related Companies’ stake in the project. A year earlier, Vornado and Related landed a $271 million loan package from Deutsche Bank for the redevelopment.
Originally targeting life sciences tenants, Vornado expanded its search to a broader pool, leading to Meta taking more than three-quarters of the space at the Farley Building.
— Holden Walter-Warner