NEW YORK CITY—Vornado Realty Trust and the Canada Pension Plan Investment Board have increased their respective stakes in One Park Ave., a 20-story office tower in Midtown South. The joint venture, which brings VNO's stake to 55% from 49.7% and CPPIB's to 45%, values the 941,000-square-foot tower at $560 million, including the assumption of $250 million in debt.
CPPIB had previously held an indirect stake of approximately 11% through its investment in the Vornado Capital Partners Parallel LP fund. “Our increased stake in One Park Avenue aligns with our US office strategy to acquire high quality assets in key markets,” says Peter Ballon, VP and head of real estate investments—Americas at CPPIB. “The property's prime location and strong tenant base make this an attractive investment and diversify our holdings in Manhattan. We look forward to further expanding our relationship with Vornado as we continue to build our office portfolio in the US.”
Dan Fasulo, managing director at Real Capital Analytics, told Bloomberg on Wednesday that “Canadians, particularly institutional money managers, REITs and pension funds, are flush with capital due to the strong environment in Canada, and frankly they've run out of things to buy. It shouldn't surprise anyone that they would look to the US to allocate some of that money.”
VNO, which Bloomberg reported in January was looking to sell One Park, acquired a 95% interest in the tower from Murray Hill Properties LP and a unit of Cerberus Capital Management LP in a 2011 deal that valued the property at about $427 million. A JV of MHP and Westbrook Partners had paid $550 million for it at the peak of the market in 2006.
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