Vornado Closes Manhattan Mall Buy

(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)

NEW YORK CITY-Vornado Realty Trust has closed on its $689-million acquisition of the Manhattan Mall from Argent Ventures. The one-million-sf mixed-use center consists of 164,000 sf of retail space and 812,000 sf of offices.

Vornado also completed a $232-million financing of Manhattan Mall. Its loan “bears interest at Libor plus 0.55% and matures in February 2009 with three one-year extension options,” according to a company statement.

The 97%-leased Manhattan Mall is on Sixth Avenue between 33rd and 32nd streets. Steve & Barry’s University Sportswear is one of the center’s anchor tenants, while other stores include Aeropostale, Children’s Place and Victoria’s Secret.

In its office portion, Bank of America and the Interpublic Group lease a majority of the space. Vornado is also getting 250,000 sf of additional air rights in the transaction, which management expects to close some time in next year’s first quarter.

Paramus, NJ-based Vornado owns the 1.4-million-sf Pennsylvania Hotel across the street from the mall. In nearby Penn Plaza, Vornado also owns about six million sf of retail and office space. It is also one of the companies proposing the redevelopment of Farley Post Office/Moynihan Station as well as Madison Square Garden.

Locally based investment firm Argent acquired Manhattan Mall in 1998 by assuming $135 million in debt, according to published reports. In 2004 the outfit converted Manhattan Mall to a power center from a more traditional-type mall venue. Argent tapped Eastdil Secured when it decided to re-trade the property.