Vornado Realty Trust VNO, the New York-based real estate investment trust (“REIT”) has made the announcement of the completion of $273 million refinancing of Washington, DC-based office building, The Warner Building. Situated at 1299 Pennsylvania Avenue, this office building is just three blocks away from the White House, spanning over an area of 621,000 square foot.
Before this refinancing, the property was encumbered by $293 million mortgage loan with a rate of interest of 6.26%. Now, it has been refinanced into a seven year loan, which is slated to mature in Jun 2023. The rate of interest has been set at a fixed rate of 3.65% and for the first two years it is interest only and thereafter it will start amortizing on the basis of a 30-year time period.
Vornado is the owner and manager of commercial real estate in the United States, with a portfolio that is mainly located in the New York City and Washington D.C. areas. The company's core business segments include New York (comprising retail and office properties mainly in Manhattan); and Washington D.C. (office properties). For the first-quarter 2016, the company reported funds from operations (“FFO”) of $1.07 per share, missing the Zacks Consensus Estimate of $1.23. The figure also came in lower than the prior-year tally of $1.16 per share.
Currently, Vornado has a Zacks Rank #4 (Hold).
Better ranked stocks in the REIT space include Brookfield Canada Office Properties BOXC, Whitestone REIT WSR and Gaming and Leisure Properties, Inc GLPI. While Brookfield Canada Office Properties sports a Zacks Rank #1 (Strong Buy), both Whitestone REIT and Gaming and Leisure Properties carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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