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September 2, 2009
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Vornado Realty Trust (VNO), a leading real estate investment trust (REIT), recently announced the sale of an office property in the CBD of Washington DC. However, Vornado will continue to manage the property on behalf of the new owner.
The property spanning 25,000 square feet of space was sold to an institutional investor for $207.8 million or $830 per square foot at a cap rate of 6.3%. Vornado realized a net profit of approximately $41 million from the sale, and received net proceeds of $90 million after the repayment of the existing construction loans.
The property was 100% pre-leased to Mayer Brown LLC, a leading global law firm with offices in key business centers across the Americas, Asia and Europe. The new office building was designed by Helmut Jahn, a German-American architect and designer of dozens of major buildings throughout the world. The property also had LEED-CS Gold certification – a recognition of the green initiatives implemented at the building.
With a healthy balance sheet, Vornado has the resources to capitalize on potential opportunities emerging in commercial real estate. Smaller private developers and owners are running into problems refinancing loans due to problems in the credit markets. As such, it is possible that Vornado could also take advantage of distressed selling as asset values of office and retail properties continue to drop.
Read the full analyst report on "VNO"
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