Morgan Stanley Lends $205M for Vornado’s Herald Square Old Navy Buy
Damian Ghigliotty June 17, 2015, 9:28 a.m.
Morgan Stanley originated a $205 million acquisition loan to help finance Vornado Realty Trust’s purchase of the Old Navy building in Herald Square, records filed with the city show.
The three-year loan bears an interest rate of 2.25 points over Libor and two one-year extension options, according to a statement from the borrower.
Vornado bought the three-story building at 144-150 West 34th Street from a partnership between Starwood Capital Group and Crown Acquisitions for $355 million on June 2.
Starwood and Crown had paid the family-run KLM Construction Corporation $252 million for the retail property just 13 months prior, in late April 2014.
It’s a familiar asset for the New York-based lending giant. Morgan Stanley provided $175 million—with $25 million of that syndicated to another lender—for the previous purchase of 144-150 West 34th Street, as Mortgage Observer reported at the time.
Manhattan retail acquisitions, on the whole, are among the bank’s most desired deals as it looks to expand its presence in top markets in 2015, Morgan Stanley’s global head of commercial real estate lending James Flaum said in an interview this March.
The 78,000-square-foot Herald Square building is fully leased to Old Navy, the Gap-owned retail brand that sells moderately priced clothing and accessories. That lease expires in May 2019, according to Vornado.
The property, which is located across the street from Macy’s, contains air rights that allow for redevelopment of up to 300,000 square feet, property records show.
The building was completed in 1900.