WASHINGTON, DC-The Canada Pension Plan Investment Board hasacquired a 45% equity stake in two office buildings VornadoRealty owns in the District: 1299 Pennsylvania Ave., called theWarner Building, and 1101 17th St., NW. The $91 million CPPIB hassunk into the properties represents its first real estateinvestment in Washington, DC’s CBD.

|

CPPIB is assuming 45% of the existing mortgage debt. The twoassets have a total implied value of $526 million. CPPIB was unableto return a call to GlobeSt.com in time for publication.

|

Vornado realized a net gain of approximately $54 million on thesale of the Warner Building to be recognized in the fourth quarter.The gain on 1101 17th will be recognized when Vornado monetizes itsinvestment. Vornado will retain its 55% ownership interest andcontinue to manage and lease these properties.

|

CPPIB’s venture with Vornado is illustrative of a larger trendof REITs and private equity or institutional investors partneringto shore up balance sheets or stretch even further the capitalavailable to them for investment.

|

The 1299 Pennsylvania Ave. building is a 13-story, class Aoffice that is over 600,000 square feet and also houses thehistoric Warner Theatre, a 1,850-seat theatre. The transactionvalues this property at $445 million, or $737 per square foot. The1101 17th asset is a 13-story, 200,000-square-footbuilding. The transaction values this property at $81 million, or$382 per square foot. Vornado Realty Trust refinanced theWarner Building in 2006 for $292.7 million. Itrealized net proceeds of approximately $133 million after repayingthe loan.

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.