Vornado Realty Trust has suspended its efforts to sell two trophy office towers that it co-owns with the Trump Organization.
The real estate investment trust has been looking for a buyer for its 70 percent stake in the buildings, located at 1290 Sixth Avenue in Manhattan and 555 California Street in San Francisco’s Financial District. Vornado was hoping to sell the properties for around $5 billion, the Wall Street Journal reported.
If the buildings had gone for that price, the Trump family’s 30 percent stake in the partnership would have been valued at around $1.5 billion.
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But sources said Vornado could not attract buyers at that price, leading the firm to stop the sale. Potential conflicts of interest involved in making a deal with the sitting U.S. president might have given foreign buyers — who often snap up high-priced trophy properties — a second thought as well.
Vornado is now shifting its strategy for the properties.
“We are now focusing more on refinancing both assets,” said Doug Harmon, an investment advisor at Cushman & Wakefield, which was leading the sales effort for the Manhattan building. Eastdil Secured LLC was working on the San Francisco tower.
The Trump Organization is reportedly a passive owner and has no control over making sales decisions on the two buildings. In recent weeks, the company has halted its own sale of the Trump International Hotel in Washington, D.C., and while potentially letting go of its Seven Springs estate in Westchester County, New York.
“The Trump Organization is an incredible company with tremendous cash flow. We have never been stronger,” the company told the Journal.
[WSJ] — Akiko Matsuda