Vornado Buys LIC Building for $142M

NEW YORK CITY—Vornado Realty Trust has acquired the eight-story, 437,000-square-foot Center Building in Long Island City for approximately $142 million.

The Paramus, NJ-based REIT purchased the property at 33-00 Northern Blvd, from Perella Weinberg Partners Asset Based Value Strategy, an alternative asset management strategy and a unit of Perella Weinberg Partners, and Madison Marquette. The partnership of Perella Weinberg and Madison Marquette acquired the building in late 2012 and the $84.5-million deal was announced in early 2013.

The purchase price includes the assumption of an existing $62 million 4.43% mortgage maturing in October 2018. The purchase is expected to close in the first quarter of 2015, according to an announcement by Vornado Realty Trust. David Robinov and Marc Warren of Ackman-Ziff represented the seller in the direct deal.

The building was 88% leased at the time of purchase and is now approximately 98% leased, according to Perella Weinberg Partners. Among its new tenants is the New York Foundling, which signed a 15-year lease for over 35,000 square feet at the property.

“When we acquired the Center Building, our goal was to enhance the value of this premier commercial complex, while contributing to the redevelopment of this rapidly growing area in the city,” says David Schiff, partner at Perella Weinberg Partners and portfolio manager of the Asset Based Value Strategy unit. “Working closely with Madison Marquette, we have been able to meet our investment objectives in under two-year's time and we are excited to pass stewardship of the building onto Vornado.”

Amer Hammour, chairman of Madison Marquette, adds, “We are pleased with the tremendous success of the Center Building, our first acquisition with the joint venture. This project underscores our strategy of identifying highly attractive properties in emerging urban markets and creating value with more strategic leasing and repositioning. We are also very pleased to have contributed to the positive market momentum in Long Island City and look forward to furthering our partnership with Perella Weinberg Partners with future acquisitions.”