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PARAMUS, NJ-Vornado Realty Trust today is under contract to buy a 70% interest in two trophy office towers. The buildings are the 42-story, two-million-sf 1290 Ave. of the Americas, located on an entire blockfront in Manhattan, and the 1.8-million-sf Bank of America Center at 555 California St. in San Francisco.

According to details released today by Vornado, the price for the 70% interest in the two buildings is just more than $1.8 billion, consisting of $1.01 billion in cash and $797 million of existing debt Vornado’s share of the debt is comprised of $308 million secured by the New York City building and $489 million secured by the San Francisco asset. The sale price factors out to $775 per sf for 1290 Ave. of the Americas and $575 per sf for the Bank of America Center.

Vornado is acquiring the controlling interests by buying all of the shares of a group of foreign companies that own, through US firms, the 1% sole general partnership interest and 69% of limited partnership interests in the two properties. The US entities are Apollo Real Estate, in the case of the New York City building, and Hudson Waterfront Associates in the case of the San Francisco building. The acquisition is expected to close in Q2 2007.

The remaining 30% limited partnership interest in the buildings continues to be owned by Donald Trump, who in August 2005 sued the general partners of the two buildings over an unrelated matter. That suit, in New York State Supreme Court, focused on claims arising from a dispute about the sale price and use of proceeds from the sale of properties on the former Penn Central rail yards on Manhattan’s West Side. The claims were dismissed, but Trump has sought re-argument, and as part of its deal for the New York City and San Francisco buildings, Vornado has agreed to indemnify the sellers for liabilities and expenses relating to Trump’s claims.

The largest tenants at the 100% occupied 1290 Ave. of the Americas, include AXA, Morrison & Foerster, Bryan Cave and Microsoft. The Bank of America Center, 94% leased, has Bank of America, UBS and Goldman Sachs as its biggest tenants.

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