* Companies in joint venture to own building's debt
* Building one of the most expensive in NYC
* Vornado shrs down 2.2 pct, SL Green down 1.2 pct
(Adds building details, background, byline)
By Ilaina Jonas
NEW YORK, March 16 Vornado Realty Trust (VNO.N)
and SL Green Realty Corp (SLG.N), two large real estate
investment trusts (REITs), said on Wednesday they have formed a
joint venture to hold $400 million in debt on one of the most
expensive office buildings in Manhattan.
Broadway Partners and Middle East money manager Investcorp
paid $1.278 billion in 2007 for the building at 280 Park
Avenue. It was the fourth-highest price paid for an office
building that year, according to Real Estate Alert.
It consists of a 31-story tower, a 43-story tower and a
14-story connecting building and is 1.237 million square feet.
The owners have struggled with rising vacancies. Deutsche
Bank left after its lease on 338,700 square feet expired last
month. The National Football League's lease on 205,000 square
feet of space is due to expire at the end of February 2012.
That could leave the office complex 45 percent empty.
Investment bank EdgeRock Realty Advisors has been
representing Broadway Partners in its search for investors.
Broadway and Investcorp financed their purchase with $1.125
billion of debt, including a $440 million senior mortgage. The
rest of the debt was sliced into six pieces. Vornado held the
most junior piece and SL Green held four pieces. A group owns
the remaining debt.
Under the terms of the joint venture, Vornado paid SL Green
$111 million and assumed $15 million of SL Green's debt
position, Vornado and SL Green said in a statement.
Broadway Partners has encountered problems with other
properties. In 2009, it lost the John Hancock Tower, Boston's
tallest building, in a foreclosure auction. Broadway had paid
about $1.3 billion for the property in 2006. Mortimer
Zuckerman's Boston Properties Inc (BXP.N) bought it in 2010 for
Vornado closed down 2.2 percent at $85.07 on the New York
Stock Exchange. SL Green closed down 1.2 percent at $69.03. The
joint venture was announced after the market closed.
(Reporting by Ilaina Jonas; Editing by Richard Chang)