Vornado Completes $120 Million Refinancing of 4 Union Square South

Rhea-AI Summary

Vornado Realty Trust (NYSE:VNO) has successfully completed a $120 million refinancing of its 4 Union Square South property, a 204,000 square foot retail property in Manhattan. The new ten-year interest-only loan features a fixed rate of 5.64%.

This refinancing replaces the previous $120 million loan that had an interest rate of SOFR plus 1.50% (equivalent to 5.85% as of August 11, 2025) and was set to mature in August 2025. The refinancing represents a strategic move to secure long-term fixed-rate financing for this significant Manhattan retail asset.

Positive

• Secured long-term fixed-rate financing for 10 years
• Achieved slightly lower interest rate (5.64%) compared to previous rate (5.85%)
• Maintained interest-only payment structure, preserving cash flow

Negative

• Refinancing amount remained unchanged at $120 million with no cash-out opportunity

Insights

Commercial Real Estate Financial Analyst

Vornado secured favorable refinancing terms, locking in a slightly lower fixed rate versus the previous variable rate loan.

Vornado has successfully refinanced its $120 million loan for 4 Union Square South, a significant 204,000 square foot retail property in Manhattan. The new financing structure offers two key advantages over the previous arrangement. First, the company has secured a fixed interest rate of 5.64% compared to the previous variable rate of SOFR plus 1.50% (which stood at 5.85% as of August 11). This 0.21% rate reduction provides immediate interest expense savings while eliminating future interest rate risk.

The second notable benefit is the interest-only structure, which improves cash flow by eliminating principal amortization requirements. With the full $120 million principal now due at maturity in 2035, Vornado preserves capital that can be deployed elsewhere. The 10-year term also significantly extends the debt maturity profile from the previous loan that was set to mature this month.

This refinancing represents prudent financial management amid the current interest rate environment. The transaction maintains Vornado's leverage on this asset while securing long-term, predictable financing costs. For a retail property in Manhattan – a sector facing challenges – locking in decade-long financing demonstrates lender confidence in both the asset and Vornado's management. The slight interest savings, estimated at approximately $250,000 annually, contributes incrementally to improved funds from operations (FFO).

NEW YORK, Aug. 12, 2025 (GLOBE NEWSWIRE) --

Vornado Realty Trust (NYSE:VNO) announced today that it has completed a $120 million refinancing of 4 Union Square South, a 204,000 square foot Manhattan retail property. The ten-year interest only loan has a fixed rate of 5.64%.

The loan replaces the previous $120 million loan that bore interest at SOFR plus 1.50% (5.85% as of August 11, 2025) and was originally scheduled to mature in August 2025.

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 interest rate fluctuations and the effects of 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.

FAQ

What are the terms of Vornado's (NYSE:VNO) new refinancing for 4 Union Square South?

The refinancing includes a $120 million, ten-year interest-only loan with a fixed rate of 5.64% for the 204,000 square foot Manhattan retail property.

How does VNO's new loan rate compare to the previous financing?

The new fixed rate of 5.64% is slightly lower than the previous loan's rate of SOFR plus 1.50% (which was 5.85% as of August 11, 2025).

What is the size of Vornado's 4 Union Square South property?

The property is a 204,000 square foot retail property located in Manhattan.

When was Vornado's previous loan for 4 Union Square South scheduled to mature?

The previous loan was originally scheduled to mature in August 2025.