雅虎香港財經 Vornado's (VNO) Retail JV Boosts Strength With $400M Refinancing
Vornado Realty Trust’s VNO 52% owned street retail joint venture (“JV”) recently completed a $400 million refinancing of 640 Fifth Avenue. This Manhattan office and retail building encompasses 315,000 square feet of space.
The interest-only, non-recourse loan carries a fixed rate of 7.47% and is slated to mature in July 2029.
The street retail JV reduced the previous $500 million loan by paying $100 million. The loan carried interest of Secured Overnight Financing Rate (“SOFR”) plus 1.11% and was set to mature in August 2024.
This refinancing offers Vornado enhanced financial flexibility. Extended maturities of the assumed debt will help the company improve its maturity profile and enjoy greater liquidity for day-to-day operations.
Vornado makes efforts to boost its cash flow and alleviate bottom-line pressure. Further, it focuses on greater financial flexibility and strengthening of its balance sheet position.
In April 2024, VNO and SL Green SLG modified and extended the $125 million mezzanine loan on 280 Park Avenue and repaid the loan of $62.5 million.
Both companies have also closed on a modification and extension of the $1.075 billion securitized mortgage at 280 Park Avenue. The modification pushed the maturity date to September 2026, with the partnership’s option to extend further until September 2028. The interest rate was maintained through the fully extended maturity date at 1.78% over Term SOFR.
As of Mar 31, 2024, VNO had $3 billion of liquidity, which consisted of $1.1 billion of cash and cash equivalents and restricted cash and $1.9 billion available under its $2.5 billion revolving credit facilities.
Vornado’s focus on having assets in such a few select high-rent, high barrier-to-entry geographic markets and its diversified tenant base, including several industry bellwethers, are expected to fuel its growth over the long term. However, a high interest rate environment raises concerns.
Over the past three months, shares of this Zacks Rank #4 (Sell) company have declined 6.8% compared with the industry's fall of 5.8%.
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Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Lamar Advertising LAMR and Rexford Industrial Realty REXR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for LAMR’s 2024 funds from operation (FFO) per share has moved 3.7% northward over the past two months to $8.03.
The Zacks Consensus Estimate for REXR’s current-year FFO per share has been raised marginally over the past two months to $2.34.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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Vornado Realty Trust (VNO) : Free Stock Analysis Report
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