Vornado Seeks Loan on H&Mís NY Flagship
Vornado Realty wants to borrow $100 million to $115 million against a Midtown Manhattan building that houses clothier H&Mís flagship store.
The New York REIT is shopping for a 10-year, fixed-rate mortgage on the property, at the southeast corner of West 34th Street and Seventh Avenue. At $100 million, the loan-to-value ratio would be about 55%. Securitization shops and insurers are both looking at the assignment, although insurers would likely be able to offer lower interest rates.
The 43,000-square-foot building, at 435 Seventh Avenue, is fully leased to the Swedish retailer. It is part of the Herald Square retail corridor, which runs along West 34th Street from Fifth to Seventh Avenue, anchored by Macyís flagship store. Retail rents in the corridor averaged $499/sf in last yearís fourth quarter, up from $481/sf in the previous quarter, according to CBRE.
Vornado would use some of the proceeds of a new loan to retire a $52 million mortgage originated in 2009. That loan matures in August, although it has two one-year extension options. It carries a floating rate of 300 bp over Libor with a floor of 5%. By refinancing, Vornado likely could lock in a lower coupon.
The company is one of the largest landlords in the Herald Square vicinity. Vornadoís other nearby properties include Manhattan Mall, at 100 West 33rd Street; Hotel Pennsylvania at 401 Seventh Avenue; and office buildings at One, Two and 11 Penn Plaza, as well as Seven and 330 West 34th Street.