On the firm’s Q1 earnings call, Steven Roth, Vornado Realty Trust CEO, started out by noting that Michael Franco was appointed president for Vornado. “Michael has been an important part of our management since 2011 most recently serving as Chief Investment Officer where he has been leading for acquisitions, dispositions and financing and has been involved in all important decisions and strategies,” he said.
He also pointed out that David Greenbaum, who has been his partner as President of The New York Division since joining the company in 1997 as part of the Mendik acquisition has decided to cut back, spent half his time in Arizona and half in New York while continuing leadership as Vice Chairman. “David will join the board this year when we add an additional independent trustee.”
He pointed out that he “promoted David’s two most important lieutenants Glen Weiss our head of office leasing; and Barry Langer our head of development to the positions of — to the positions of coheads of real estate. Glen has been with us since the 1997 Mendik acquisition and Barry has been with us since 2003. We are delighted to promote Michael and to promote Glen and Barry. These are promotions from within our organization. Each of these talented leaders is proven, is the best in the business and is ready to step up. They have been with us for a combined 46 years. We know them well.”
One might say that the big deal in the quarter for the company was its blockbuster retail deal. “To me as bigger deal was our recruiting Haim Chera to head our retail business. In my mind, Haim is hands down the best retail executive there is, in addition to running our existing portfolio the disruption in retail will present enormous opportunities for those with talent and capital. We have both in full measure. We are excited about the opportunities that lie ahead.”
In the quarter, Vornado also some housecleaning. “We sold our shares of Lexington Realty Trust and Urban Edge Properties for $276 million resulting in a financial statement gain of $78 million. We used the proceeds from these sales together with existing cash to retire our 400 million principal amount or 5% senior secured unsecured notes which were scheduled to mature in January 2022.”
Now to that big retail deal. “As you already know, we created a joint venture and transferred a 45.4% common equity interest in seven assets on Upper Fifth Avenue and Times Square to a group of international investors at a evaluation of $5.556 billion. Taken together, our press release 8-K filings and the disclosure in my amended shareholder letter represented in my mind some of the most comprehensive disclosure I have seen about a deal. Reading your notes and talking to investors we are very pleased that almost everyone got it. The 4.5% cap rate is spot on with our published NAV. A few were surprised that we have such a robust bid for these retail assets. They shouldn’t have been surprised. As we have been saying time and time again the very best quality assets such as these are always in high demand by institutional and foreign capital. The deal value at share was $5.327 billion as against our economic basis of $2.873 billion and a tax basis of $1.561 billion. Everyone can do the math.”