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PARAMUS, NJ-When Vornado Realty Trust and its partners bought Toys “R” Us for $6.6 billion in 2004, the firm’s president, Michael Fascitelli, admitted it was as much for the real estate as for the retail operations. “We think the real estate is unbelievably valuable, and we’re going to work the real estate in that toy business like you’ve never seen,” he commented at an industry event.

The real estate part of the acquisition game plan has started to fall into place. Vornado has announced that it has entered into an agreement to buy up to 44 shuttered Toys “R” Us stores for $190 million. The units amount to about half of the stores the Wayne-based toy chain has closed since the beginning of the year, a cost-cutting disposition that was launched in January.

Of the 44 stores, which total 1.8 million sf and are located in eight East Coast states, Texas and California, eight are ground-leased, 15 are space-leased and the rest are owned in fee. Other retailers either lease or sublease 26 of the properties, according to data released by Vornado, and the other 18 are currently vacant.

Vornado teamed up with private equity firms Bain Capital and Kohlberg Kravis Roberts & Co. in the acquisition of Toys “R” Us, and Vornado’s share in the retailer is 32.9%. With the deal, which is expected to close in Q4 subject to landlords’ consent and other closing conditions, Vornado’s share in Toys “will be reflected as an adjustment to the company’s basis in this investment and will not be recorded as income,” according to a statement released by REIT.

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