Crown Acquisitions, Qatar Investment Authority, and unnamed institutional investors have acquired a 45.4 percent common equity interest in Vornado‘s Fifth Avenue and Times Square retail portfolio. The deal values the assets at around $5.6 billion.
Dig Deeper: The portfolio spans 489,000 square feet, and includes prime retail space at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway, and 1540 Broadway. It also contains 327,000 square feet of office space, plus signage at 1540 Broadway and 1535 Broadway, a parking garage at 1540 Broadway, and a theater at 1535 Broadway, Bloomberg reported.
Deal structure: The deal’s capital structure is 50 percent common equity, and 50 percent debt and preferred equity. Vornado holds all of the $1.8 billion in preferred equity, while the JV took on $950 million of mortgage debt, according to TRD. The investors are also contributing about $1.3 billion of cash.
Worth Noting: The seller is expected to reap $1.2 billion of net cash proceeds from the deal.
The backdrop: Vornado’s Steve Roth: “Our stock price for the last five years has been disappointing and, in my mind, disconnected from the value of our assets… Something is obviously wrong.” This is the company’s latest attempt to demonstrate the actual market value of their assets.