Vornado Buys 46% Stake In Retail &Signage At Marriott Marquis Times Square Hotel

(RTTNews) - Vornado Realty Trust (VNO) said that it has acquired from Host Hotels & Resorts an approximate 46% interest in the retail condominium located at the base of the New York Marriott Marquis Times Square hotel for $442 million.

Vornado had previously acquired a 54% interest and redeveloped the property. The original transaction provided that Vornado would become the 100% owner through a put/call arrangement, based on a pre-negotiated formula. This transaction satisfies the put/call arrangement.

Vornado now owns 100% of the fee in 45,000 square feet of retail which is 100% leased to T-Mobile, Invicta, Swatch, Levi's and Sephora, the 1,611 seat Marquis Theater leased to the Nederlander Organization, as well as the largest digital sign in New York with a 330 linear foot, 25,000 square foot display.

Vornado had previously accounted for its interest in the property as a capital lease. Vornado's basis in the property now totals approximately $663 million, inclusive of all capital previously invested and pro forma for approximately $17 million of tenant improvements to be paid through 2019. The property will generate an 8.5% stabilized Cash NOI yield on Vornado's $663 million investment beginning in the first quarter of 2019.