Vornado Realty Trust leases 1,076,000 sq ft to NYU for 70 years, receiving $935 million prepaid payment and annual rent.
Quiver AI Summary
Vornado Realty Trust announced the completion of a 70-year master lease with New York University for 1,076,000 square feet at 770 Broadway, on a triple net basis. NYU made a prepaid lease payment of $935 million and will pay approximately $9.3 million annually during the lease. The agreement allows NYU to purchase the property in 2055 and again in 2095. NYU will take over existing office leases and related tenant income, while Vornado will keep the 92,000 square feet retail space leased to Wegmans. Additionally, Vornado used part of the prepaid payment to settle a $700 million mortgage on the property.
Potential Positives
- Vornado Realty Trust secured a long-term master lease with NYU for 1,076,000 square feet, ensuring stable and predictable rental income over a 70-year period.
- The prepaid lease payment of $935 million provides Vornado with significant immediate capital, allowing for the repayment of a $700 million mortgage loan, enhancing the company's financial position.
- The retention of the 92,000 square feet retail condominium leased to Wegmans diversifies Vornado's revenue stream and retains an income-generating asset within its portfolio.
Potential Negatives
- Vornado executed a long-term lease with NYU at a significant square footage, which may indicate a lack of demand for the property from other tenants.
- The reliance on prepaid lease payments to repay a substantial mortgage loan suggests potential liquidity concerns for Vornado in the absence of guaranteed ongoing revenue.
- The lengthy lease term could limit Vornado's flexibility to re-evaluate or adapt its strategy for the property over the next several decades.
FAQ
What is the master lease agreement between Vornado and NYU?
Vornado and NYU signed a 70-year master lease for 1,076,000 square feet at 770 Broadway on a triple net basis.
How much did NYU pay for the lease?
NYU made a prepaid lease payment of $935 million and will pay approximately $9.3 million annually during the lease.
What are NYU's purchase options for the leased property?
NYU has options to purchase the property in 2055 and at the end of the lease term in 2095.
How will Vornado utilize the prepaid lease payment?
Vornado will use a portion of the prepaid lease payment to repay a $700 million mortgage loan on the property.
What retail space will Vornado retain?
Vornado will retain the 92,000 square feet retail condominium that is leased to Wegmans.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$VNO Insider Trading Activity
$VNO insiders have traded $VNO stock on the open market 1 times in the past 6 months. Of those trades, 0 have been purchases and 1 have been sales.
Here’s a breakdown of recent trading of $VNO stock by insiders over the last 6 months:
- RUSSELL B JR WIGHT sold 2,000 shares for an estimated $89,727
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$VNO Hedge Fund Activity
We have seen 179 institutional investors add shares of $VNO stock to their portfolio, and 181 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- INVESCO LTD. added 1,651,819 shares (+111.3%) to their portfolio in Q4 2024, for an estimated $69,442,470
- DEUTSCHE BANK AG\ added 1,567,742 shares (+180.7%) to their portfolio in Q4 2024, for an estimated $65,907,873
- ALYESKA INVESTMENT GROUP, L.P. removed 1,441,338 shares (-100.0%) from their portfolio in Q4 2024, for an estimated $60,593,849
- UBS GROUP AG added 1,366,866 shares (+436.0%) to their portfolio in Q4 2024, for an estimated $57,463,046
- NORTHERN TRUST CORP added 1,358,498 shares (+98.3%) to their portfolio in Q4 2024, for an estimated $57,111,255
- JPMORGAN CHASE & CO removed 889,226 shares (-25.2%) from their portfolio in Q4 2024, for an estimated $37,383,061
- CITADEL ADVISORS LLC removed 886,043 shares (-28.1%) from their portfolio in Q4 2024, for an estimated $37,249,247
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE:VNO) announced today that it has completed a master lease with New York University (“NYU”) to lease 1,076,000 square feet at 770 Broadway, on an “as is”, triple net basis for a 70-year lease term. Under the terms of the master lease, a rental agreement under Section 467 of the Internal Revenue Code, NYU made a prepaid lease payment to Vornado of $935 million and will also make annual lease payments to Vornado of approximately $9.3 million during the lease term. NYU has an option to purchase the leased premises in both 2055 and at the end of the lease term in 2095. NYU will assume the existing office leases and related tenant income at the property.
Vornado used a portion of the prepaid lease payment to repay the $700 million mortgage loan which previously encumbered the property.
Vornado will retain the 92,000 square feet retail condominium leased to Wegmans.
Vornado Realty Trust is a fully-integrated equity real estate investment trust.
CONTACT
Thomas J. Sanelli
(212) 894-7000
Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this press release. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024. Currently, some of the factors are the increased interest rates and inflation on our business, financial condition, results of operations, cash flows, operating performance and the effect that these factors have had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general.
