Hotel Pennsylvania
The Hotel Pennsylvania, Seventh Avenue at 33rd Street, generated a best ever $37.9 million of EBITDA in 2007, $10.4 million more than in 2006, a 37.8% increase. This property continues to trend higher in 2008. David Greenbaum oversees this asset which is very capably managed by Fred Grapstein.
In 2007, Merrill Lynch ran a process for the location of a new headquarters facility for the new century. Our hat in the ring was the Hotel Pennsylvania. After an extensive search, Merrill Lynch selected the Hotel Pennsylvania site with its 80,000 square foot footprint for trading floors and an over two million square foot total building envelope. The credit crisis and Merrill's management changes disrupted this deal, but the fact remains that our site was the last man standing in a rigorous citywide search.
AmeriCold
On March 31, 2008, Vornado and Morgan Stanley Real Estate (successor to Crescent Real Estate, our original partner) sold our entire interests in AmeriCold to The Yucaipa Companies. We received net proceeds of approximately $220 million for our share, which will result in a gain of approximately $110 million to be recognized in the first quarter of 2008. The sales price was based on a $1.52 billion valuation before debt and other obligations. This business never performed to our expectations. One down in our simplification program – and a big one.
Alexander's
Vornado owns 1,654,000 shares of Alexander's, Inc. (market value of $638 million today), a 33% interest in this New York-centric REIT. Like all publicly-traded real estate, Alexander's suffered a decline in stock price in 2007, in our case 15.8%. Alexander's assets include the Bloomberg/Beacon Court Tower, the Kings Plaza Regional Mall, the Rego Park, Queens existing center and under-development project and cash balances of approximately $550 million, over $100 per share. Alexander's is a separate SEC filer – its documents are available on www.alx-inc.com.
(6)	A little history here. In October 1997, we acquired AmeriCold Corporation and URS Logistics, Inc. in a single transaction in a 60/40 partnership with Crescent Real Estate Equities Company. Subsequently, we acquired The Carmar Group, and then Freezer Services, Inc., and combined all four companies into a single operating unit, thereby creating AmeriCold with a 30% market share of the national refrigerated warehouse industry. In 1998, we separated the business into an OPCO/PROPCO structure, elected REIT status for PROPCO and spun off OPCO into a paper clip. We changed management two times. In 2004, we bought back OPCO, which was struggling, having never met its financial budgets, and simultaneously sold 20.7% to Yucaipa, who would oversee day-to-day operations. Yucaipa brought in its own people, a third management change. In 2004 and 2006, we financed and refinanced the business, taking advantage of receptive capital markets, putting low-rate, assumable, term financing on the balance sheet which funded payback of almost all of our equity.
	Wendy and Joe Macnow were responsible for monitoring this investment and, after Mike made the deal, implementing our exit.