Vornado Buys Bergen Mall for $145M

PARAMUS, NJ-Vornado Realty Trust might be better known for its high-profile office holdings across the river in Manhattan, but the REIT has a portfolio that includes 56 shopping centers totaling 12.4 million sf-and the company has just added another biggie to that group. Vornado is paying $145 million for the one million-sf Bergen Mall which, coincidentally, is right in the Paramus-based company’s own back yard.

The seller is another prominent name, the Indianapolis-based Simon Property Group. With 245 shopping centers amounting to 190 million sf, Simon is the world’s largest shopping center owner/developer.

Vornado is paying for the venerable shopping mecca in part through a Section 1031 tax-free like-kind exchange with a portion of the proceeds from its recent sale of the Two Park Avenue office building in Manhattan, according to company officials. The 965,000-sf tower was sold to Germany’s SEB Immobilien-Investment GMBH for $292 million, with Vornado reporting a gain of $157 million (see earlier story).

For Simon Property Group, meanwhile, the Bergen Mall transaction “generated a gain of approximately $50 million,” according to a company official. The sale’s inclusion as part of the Section 1031 Exchange “will defer the recognition of the gain for tax purposes,” according to the spokesperson.

The 1960s-era Bergen Mall, situated on Route 4 here, is one of several major retail complexes that put this Bergen County town on the map as a shopping destination. The property, which has undergone multiple makeovers, expansions and ownership changes over the years, grew up near such competitors as Garden State Plaza and, later, Paramus Park.

And the property is about to get yet another makeover. “We intend to expand, re-tenant and redevelop the center in order to reposition the asset,” according to a Vornado spokesperson.

The present tenant mix includes an anchor complement of Macy’s, Value City, Marshalls and a Saks Fifth Avenue Off Fifth outlet store. Bergen Mall’s roster of 70 specialty tenants includes names like Bath & Body Works, Dress Barn, Gap/GapKids, B. Dalton Bookseller and CVS.

Even with the sale, Simon Property Group remains the Garden State’s largest owner of regional malls. Its current properties include Brunswick Square in East Brunswick, Livingston Mall in Livingston, Menlo Park Mall in Edison, Newport Centre in Jersey City, Ocean County Mall in Toms River and Rockaway Townsquare in Rockaway.