Abu Dhabi fund is said to buy Vornado stake in 330 Madison Avenue

Abu Dhabi Investment Authority to buy over 330 Madison Avenue from Vornado Realty Trust. (Reuters pic)

NEW YORK: Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, plans to buy out Vornado Realty Trust’s 25% stake in the midtown Manhattan office tower at 330 Madison Ave., according to a person familiar with the matter.

The deal would give the Abu Dhabi fund, already the building’s majority holder, full ownership. Vornado on Monday said it agreed to sell its interest in the property as part of a “buy/sell process initiated by its 75% partner at a US$900 million valuation.” The New York company anticipates about US$100 million of net proceeds after deducting an existing US$500 million mortgage and expects the transaction to close in the third quarter.

The 846,000-square-foot (79,000-square-meter) tower is in a prime location, just a block from Grand Central Terminal and One Vanderbilt, the shiny new skyscraper SL Green Realty Corp. is building. Tenants include Guggenheim Partners, HSBC, Wells Fargo & Co. and Jones Lang LaSalle Inc., according to Vornado’s website. A Vornado spokeswoman declined to comment beyond the company’s statement.

ADIA, as the Abu Dhabi fund is known, allocates 5% to 10% of its massive portfolio to real estate, according to its annual report. The fund doesn’t divulge its assets under management, but it’s estimated to have about US$696 billion. That makes it the third-largest in the world, according to data from the Sovereign Wealth Fund Institute