- Vornado Realty Trust (VNO, Financial) completes $450 million financing for the 1535 Broadway retail property in Times Square.
- The interest-only, non-recourse loan has a fixed rate of 6.90%, maturing in May 2030.
- $407 million of the net proceeds are used to partially redeem the Retail JV preferred equity.
Vornado Realty Trust (VNO) has successfully finalized a $450 million financing arrangement for its premier retail property located at 1535 Broadway in Times Square. The property is noted for its full blockfront 4K LED signage and is part of Vornado's street retail joint venture, where the company holds a 52% stake.
The financing deal is structured as an interest-only, non-recourse loan that carries a fixed interest rate of 6.90%, set to mature in May 2030. This loan structure provides Vornado with an advantageous position by limiting liability solely to the property itself, while also benefitting from an interest-only payment schedule through the duration of the loan term.
After accounting for transaction costs and reserves, Vornado utilized $407 million from the net proceeds to partially redeem its Retail JV preferred equity. This strategic use of funds aims to optimize Vornado's capital structure by potentially reducing ongoing preferred dividend obligations, which may enhance cash flow profiles for the joint venture.
