Vornado Realty Trust Completes $450M Refinancing of Manhattan Office Building PENN 11

Vornado Realty Trust has completed a $450 million refinancing of PENN 11, a Manhattan office building, with a five-year interest-only loan maturing in August 2030 at a fixed rate of 6.35%. The refinancing paid down $50 million of the prior $500 million loan, which was set to mature in October 2025. The new loan has a fixed all-in rate of 6.35%.

Vornado Realty Trust has successfully completed a $450 million refinancing of PENN 11, a 1.2 million square foot office building located in THE PENN DISTRICT, Manhattan. The new five-year interest-only loan, set to mature in August 2030, carries a fixed rate of 6.35% [2].

The refinancing replaces a prior $500 million loan that was due in October 2025 and carried an interest rate of SOFR plus 2.06% (swapped to a fixed rate of 6.28%) [2]. Vornado paid down $50 million of the previous loan, effectively extending its debt maturity by five years while maintaining a relatively stable interest rate environment [2].

This strategic move by Vornado Realty Trust demonstrates its ability to secure long-term financing in a challenging commercial real estate market, particularly for office properties. By reducing the principal by $50 million and locking in a fixed rate through 2030, the company has effectively managed its debt portfolio while providing certainty against future interest rate fluctuations [2].

The five-year interest-only structure preserves cash flow during the term, as no principal payments will be required until maturity. This financing structure for a 1.2 million square foot Manhattan office building in THE PENN DISTRICT suggests lenders maintain confidence in this specific asset despite broader market concerns about office valuations. The marginal increase in interest rate (0.07%) represents a reasonable premium for the extended five-year term, particularly considering the uncertain economic environment mentioned in their forward-looking statements regarding inflation and interest rate fluctuations [2].

References:
[1] https://www.costar.com/article/714568968/vornado-lands-450-million-refinancing-loan-for-apple-anchored-manhattan-building
[2] https://www.stocktitan.net/news/VNO/vornado-completes-450-million-refinancing-of-penn-3pfttih62v64.html