Vornado Realty Trust, a popular commercial real estate manager in the U.S. has sold its stake in a site in Downtown Crossing, Boston, to Millennium Partners, a popular commercial property firm.
Vornado, which owned 50 percent stake in the site, received net proceeds of around $45 million, which is a $2 million loss for the company.
Millennium Partners has complete control now and intends to redevelop the site, construction on which had been stalled for years. The company plans to turn the place into a commercial hub and work will start sometime late in 2013, reports Bloomberg.
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. The company has already entered into contract for selling a parcel of land at Harlem Park for $62 million to an unidentified buyer. It also sold 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.
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.
In addition to selling unused assets, it is also planning to modernize its existing properties. According to the Commercial Observer, Vornado is planning to renovate some of its properties in and around Penn Station in order to attract tech and media related tenants.
