Vornado Realty Trust has snapped up a prized historic property in Boston's Downtown Crossing district: Filene's department store.
The four-building, 656,000-square-foot property, which went on the block last year as a result of Cincinnati-based Federated divesting of May Company holdings, is situated on a prime piece of downtown real estate in a district undergoing redevelopment.
Vornado agreed to buy the property for $100 million after another New York buyer failed to close on a previous deal.
The company will propose a redevelopment plan that is “sensitive to the desire of the city's constituency and satisfies the district's redevelopment plan,” according to a Vornado spokesperson, suggesting a mixed-use project is likely.
Howard Davidowitz, chairman of Davidowitz & Associates, Inc., a national retail consulting and investment firm based in New York, says Vornado's move fits into its strategy of buying retail properties with the long-term view of converting them to mixed-use.
“There is a mixed bag, when you look at the sale in Boston and how quickly Federated [sold] that store for a nice price and then look at the lousy prices Winn-Dixie has been getting,” he says.
The transaction is expected to close in the last quarter of 2006.
“We can't decide for Vornado what they will build, but we have told them we prefer mixed-use on the site,” says Jessica Shumaker, spokesperson for the Boston Redevelopment Authority.
For Vornado, the deal is similar to one where it acquired the Alexander's department store chain and sat on the site at 731 Lexington Ave. in Manhattan for years before developing a mixed-use tower anchored by Bloomberg.