Vornado Realty Trust VNO recently disclosed that it has completed a $375-million refinancing of 888 Seventh Avenue, which is an 882,000-square foot Manhattan office building. Notably, the loan, with a term period of five years, is interest-only at London inter-bank offered rate (“LIBOR”) plus 1.60%, and was swapped for a term loan with a fixed interest rate of 3.15%. This move has fetched the NY-based real estate investment trust (“REIT”) net proceeds of around $49 million. Earlier, this property was encumbered with a 5.71% $319-million mortgage, slated to mature in Jan 2016.
Vornado is the owner and manager of commercial real estate in the U.S., with a portfolio mainly spread across the New York City and Washington D.C. areas. On Nov 2, 2015, Vornado had entered into an unsecured delayed-draw term loan facility of up to $750 million. The rate of interest associated with this facility is determined on the basis of LIBOR plus 115 basis points (bps) with a fee of 20 bps per annum on the unused portion. The loan facility, due for maturity on Oct 2018, has the option of two one-year extensions. We believe these developments will likely boost Vornado’s financial capacity in the near future.
Vornado reported funds from operations (“FFO”) per share of $1.25 for third-quarter 2015, in line with the Zacks Consensus Estimate.
Vornado currently carries a Zacks Rank #3 (Hold).
Investors interested in the REIT space may also consider stocks like Hersha Hospitality Trust HT, Getty Realty Corp. GTY and Mack-Cali Realty Corp. CLI All three stocks sport a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment