NEW YORK CITY—Vornado Realty Trust said Friday it had completed the sale of 1740 Broadway, a 601,000-square-foot office tower between West 55th and 56th streets, for $605 million, or $1,000 per square foot. The REIT did not identify the buyer; published reports indicate it was the Blackstone Group, though its core-plus real estate fund.
VNO says the financial statement gain of $439 million will be recognized in the fourth quarter. The tax gain of approximately $484 million will be deferred in a like-kind exchange as part of VNO's previously $700-million announced acquisition of the St. Regis Hotel retail condominium and the adjacent retail town house.
CoStar reported that CBRE vice chairmen Darcy Stacom and William Shanahan arranged the sale of the 26-story office tower, which is fully leased. Major tenants include the Limited Brands, Davis & Gilbert and the New York City Department of Taxation and Finance.
Regarding the St. Regis retail space a few blocks east of 1740 Broadway, VNO previously announced that it now controlled approximately 75% of the joint venture which owns the property. The property has 100 feet of frontage on Fifth Avenue on the southeast corner of 55th Street, in the heart of the area which commands the world's highest retail rents. VNO also owns 689 Fifth Ave. on the same block.
As VNO bolsters its presence in high street retail, it is also planning to spin off its considerable presence in shopping centers. The company announced last week that Urban Edge Properties, a pure-play retail REIT, was expected to begin trading on the New York Stock Exchange in January.
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