CPPIB sells Manhattan stake for $875m

Vornado Realty Trust has plans to acquire Canada Pension Plan Investment Board’s 45 percent interest in Manhattan office building One Park Avenue, to take its ownership interest to 100 percent.

The purchase price values the property at $875 million.

Vornado originally acquired an interest in the property in March 2011 at a $394 million valuation and recapitalized the property with CPP Investments in June 2014 at a $560 million valuation.

In the second quarter, nearly 80 percent of NYC office sector new leases signed were within class A properties compared to 65 percent in 2019, according to JLL. Moreover, the class B market saw vacancy increase by 620 basis points year-over-year, while class A vacancy rose by 500 basis points. Flight-to-quality product was prominent within subleasing activity, with class A product accounting for 90 percent of velocity.