NEW YORK CITY-Vornado Realty Trust said Friday it has reached an agreement to sell the office portion of 866 United Nations Plaza for $200 million. The buyer in the like-kind exchange was not identified; VNO had put the six office floors up for sale a year ago, reportedly hiring CBRE vice chairman Darcy Stacom to market the 360,000-square-foot space.
The REIT said the sale would result in net proceeds of approximately $146 million, after repaying existing debt and closing costs, with a financial statement gain of $128 million and a tax gain of $166 million, to be deferred as part of VNO's previously announced $278-million acquisition of a 92.5% interest in 655 Fifth Ave. The 866 UN Plaza sale is expected to close by year's end.
The two-tower property, which also contains a residential component, was developed in the 1960s by William Zeckendorf as the Alcoa Building. It's leased largely to United Nations missions.
VNO acquired 866 UN Plaza in 1997 when Bernard Mendik merged his company with the REIT, which at that time predominantly focused on retail. Another property from the Mendik portfolio, 11 Penn Plaza, is in the midst of a pending $750-million refinancing, according to industry data.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.