By Orlando Lee Rodriguez
Not only has the “fat lady” entered the building, but she has started to sing the blues.
Vornado Realty Trust just came to an agreement to sell its ‘Harlem Park’ development site for $65 million to an undisclosed buyer.
The sale is expected to be completed in the second quarter of 2013 and the company said it stands to see net proceeds of $62 million and a net gain of $22 million.
The parcel of land, which is located at 1800 Park Avenue on the southwest corner of East 125th Street, will potentially net Vornado additional capital in the form of brownfield credits.
Ahead of the financial crisis hit, Vorando announced its intension to develop the Harlem site with Major League Baseball as the building’s main tenant. The move was expected to be a boon for the east side of 125th Street which, despite having its own Metro North station, has been slower to develop than the west side.
Vornando, a publicly traded REIT which owns some 100 million square feet of properties in the United States, is the midst of some changes.
Michael Fascitelli, the company’s CEO, who admitted in January that his company “had missed the boat” on developing in the Penn Station area, stepped down on Monday, a decision made in February after Vornado reported a $224 million loss in their J.C. Penny and Co. investment.
The company also announced that it would not be demolishing the Hotel Pennsylvania to build a new tower across from Penn Station as originally planned because of the sluggish market.
But according to Vornado officials, the company is not selling property because of trouble or changes, but because of an educated gut feeling.
Chairman Steven Roth announced to investors last week that the company intended to place properties on the market in order to take advantage of rising prices.
“I can see the bubble on the horizon, the fat lady entering the building,” Roth said in his letter. “My belly tells me prices are now higher than future prospects and therefore, we will buy carefully and likely sell more than we buy.”