Vornado Signs Agreement to Buy Boston Design Center for $96M

BOSTON-Paramus, NJ-based Vornado Realty Trust has entered into an agreement to purchase the 552,500-sf Boston Design Center for approximately $96 million. The transaction gives the REIT its first holding here and is its largest acquisition in New England.

Vornado, which inked the deal with the complex's Boston owner, the Davis Cos., released few details of the agreement, but says it is expected to close by the second quarter of next year. Vornado will pay $24 million in cash and take out a $72-million mortgage for the remainder of the purchase price.

Once that transaction is complete, Vornado's Merchandise Mart division will take over daily operations at the site. That division currently manages more than 15 similar properties throughout the East Coast, including the Washington Design Center in Washington, DC and the Merchandise Mart in Chicago. Vornado currently holds about 14.2 million sf of retail space and 8.6 million sf of showroom and office space in its portfolio. Neither Vornado nor the Davis Cos. would comment further on the transaction when contacted by GlobeSt.com.

Located 1 Design Center Place in the Seaport District along South Boston's waterfront, the Boston Design Center is considered New England's primary resource for the building and design trades. Along with 78 home and office furnishing showrooms, the building contains 150,000 sf of office space with tenants that include F. Schumacher & Co., the Furniture Guild and Paris Ceramics. Originally built in 1919 in the classical revival style, the building, formerly a military warehouse, was once considered the largest structure of its kind in the world. Situated next to the Black Falcon Cruise Terminal in South Boston, the building was renovated several years ago and a portion of the property was designated for the Boston Design Center, which has eight floors of showroom space for use by local design and furnishing groups.