Vornado Realty Trust, a popular commercial real estate manager in the U.S., has entered into a contract to sell a parcel of land at Harlem Park for $62 million. The buyer is yet to be identified.
According to Bloomberg, the site located at 1800 Park Avenue, was initially acquired by Vornado to build a 630,000 square feet office building. Apparently, The MLB Network was supposed to be the anchor tenant of the building. However, plans of building the tower were called off in 2008.
While Bloomberg says that the cancellation was due to lease agreement issues, the Real deal quotes Joseph Macnow, the CFO of Vornado saying:
"We've shut that project down. The economics today are not warranted to do that job."
The sale of the site is expected to be completed by the end of June 2013. The sale will probably give Vornado a net gain of $22 million, reports North Jersey News.
The sale of the site comes as Vornado is downsizing its assets that are outside its 'specialization'. The company now hopes to focus more on key projects and do away with unused property. In its annual letter to investors, the company said there will be more selling than buying this year, reports Commercial Observer.
"My belly tells me that prices are now higher than future prospects. It also feels to me like interest rates will stay lower for longer than the pundits expect and that we are near the tipping point where market participants will start to believe and act as if it's their God-given right to zero-bound interest rates," Steven Roth, CEO of Vornado said in the letter.
More recently, Vornado sold away its stake in LNR Property LLC, a diversified real estate management firm. Vornado owned 26.2 percent stake in the company and received net proceeds worth $241 million from the sale. It also sold retail centers in California and Pennsylvania, which combined fetched around $263 million.
