The sole office tenant at Bloomberg Tower in Midtown East isn’t going anywhere for a long time.
That’s positive news for the owner, Alexander’s, which has a short time before the mortgage on its property matures.
Bloomberg LP extended its lease for the entirety of 731 Lexington Avenue’s office space through 2040, building owner Alexander’s announced. Vornado Realty Trust owns 32.4 percent of Alexander’s, and Vornado CEO Steven Roth runs both entities.
The lease extension will kick in when Bloomberg’s current lease expires in 2029. The extension should ease the process of refinancing, which would have been difficult without any assurance that the lone office tenant would remain past that date.
Further details of the lease, including asking rent, were not released. Two years ago, Bloomberg agreed to lease its space for $132 per square foot. A representative of Vornado declined to comment.
The lease ensures Michael Bloomberg’s company will continue to occupy 947,000 square feet at the 1.3 million-square-foot property, which houses the firm’s headquarters. Most of the company’s 12,000 New York employees work there.
In a statement, Bloomberg said he believes in “the power of in-person work to drive collaboration and innovation” and added that he was “glad to be staying.”
Roth will be glad as well as he faces a deadline to refinance the property. The mortgage expires next month, prompting Fitch Ratings to lower its outlook on the debt several months ago.
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The $500 million mortgage, originated in 2017, paid off the $300 million mortgage provided by Deutsche Bank in 2014 for the office portion of the property and has a floating interest rate.
The property, which was completed in 2005, includes 105 condominium units on the top floors of the 56-story tower and about 250,000 square feet of retail.
Vornado acquired the parcel in the 1980s by buying up the stock of Alexander’s, which operated a department store there. Retail space on the lower floors is leased by Home Depot, Laderach Chocolatier Suisse, Bank of America, Citibank and Hutong.