Vornado buys 1290 6th Avenue $1b deal.

Vornado Realty Trust announced it will buy a 70% controlling interest in 1290 Avenue of the Americas and a San Francisco office tower for $1.01 billion in cash from the Asian partnership em broiled in an on-going legal fight with Donald Trump.

The REIT will also take on $797 million of existing debt and has agreed to indemnify the sellers for certain of their liabilities and expenses arising out of Trump's law suits. The deal equates to a purchase price of around $775 psf for 1290 Avenue of the Americas and approximately $575 psf for 555 California Street, according to Vornado, which declined comment beyond an official statement confirming the sale was expected to close in the second quarter.

Vornado purchased the 70% stake in the buildings from Hudson Waterfront Associates, a partnership of Hong Kong investors that bought the properties as part of a 1031 exchange worked out following their contentious sale of the 77-acre Riverside South development site on Manhattan's West Side it owned in partnership with Trump.

The Apprentice mogul sued the partnership claiming it failed in its fiduciary duty when it under-sold Riverside South to an Extell/Carlyle partnership for $1.76 billion (Extell subsequently flipped three of the residential towers for $816 million and is currently developing new luxury condos on the site.) The court upheld Trump's claim seeking access to his partners books and records--an action that is ongoing--but it denied his unfair sale price allegations, a decision Trump has appealed.

In its official statement regarding the purchase of the New York and San Francisco buildings, Vornado said it would indemnify Hudson Waterfront's liabilities in the sale price litigation.

Trump was travelling and unable to comment on the deal by press time.

The two million square foot 1290 Avenue of the Americas office tower takes up the entire blockfront between 51st and 52nd Streets and is 100% leased to roster of high-profile clients that include AXA, Morrison & Foerster, Bryan Cave and Microsoft.

555 California Street--the building whose lobby was featured in the 1974 film The Towering Inferno--is also known as the Bank of America Center and is 94% leased, with Bank of America as the largest tenant, along with Goldman Sachs and UBS.