Vornado Completes Master Lease with New York University for 770 Broadway
Rhea-AI Summary
Vornado Realty Trust (NYSE:VNO) has finalized a significant 70-year master lease agreement with New York University (NYU) for 1,076,000 square feet at 770 Broadway. The deal includes a $935 million upfront payment from NYU, plus annual lease payments of $9.3 million. The triple net lease arrangement allows NYU to assume existing office leases and related tenant income. NYU also secured purchase options for 2055 and 2095.
Vornado utilized part of the prepaid lease payment to clear the property's $700 million mortgage loan. The company will maintain ownership of the 92,000 square feet retail condominium currently leased to Wegmans.
[ "Secured substantial upfront payment of $935 million, strengthening cash position", "Established steady annual revenue stream of $9.3 million for 70 years", "Eliminated $700 million mortgage debt on the property", "Retained valuable 92,000 sq ft retail space leased to Wegmans", "Long-term lease provides stable occupancy with creditworthy tenant (NYU)" ]Positive
- None.
Negative
- Loss of control over 1,076,000 square feet of office space for 70 years
- Potential opportunity cost if property value significantly appreciates before purchase option dates
- Limited flexibility for property redevelopment or repositioning due to long-term commitment
News Market Reaction
On the day this news was published, VNO gained 3.68%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
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
Vornado used a portion of the prepaid lease payment to repay the
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.
FAQ
What are the key terms of VNO's master lease agreement with NYU at 770 Broadway?
How much did NYU pay upfront for the 770 Broadway lease to Vornado (VNO)?
What did Vornado (VNO) do with the lease prepayment from NYU?
What portion of 770 Broadway did Vornado (VNO) retain after the NYU lease?
When can NYU exercise its purchase options for 770 Broadway under the VNO lease?
