CSFB's affiliated entity acquired its equity interest for $60 million; the acquisition of the 825,815-sf asset was based on a total capitalization of approximately $318.5 million, or $344 per sf.

"We bought it at good value in 2001," Marc Holliday, SL Green's president and CEO tells GlobeSt.com. "We were able to realize a significant gain upon the conclusion of our retenanting program while maintaining our ability to meaningfully participate in the future upside potential of the property." Holliday explains that the firm faced a "real challenge" when it purchased the site because a major tenant's lease for 100,000 sf was up the following year. After a modest redevelopment program that involved some exterior and lobby work, the company was able to retenant the space.

SL Green retains a 16.7% interest in the new venture, which may be increased substantially based upon financial performance. The company will manage the venture, in addition to continuing its responsibility of leasing and managing the property.

The $238.5-million, 10-year interest-only loan, which bears interest at a fixed rate of 5.8%, replaced the existing $150-million floating rate loan which was scheduled to mature in January 2005. SL Green received $83 million in net proceeds--$28 million in excess of its investment in the pre-existing joint venture. Holliday adds that recapitalization also enabled the firm to strengthen its balance sheet by paying down floating rate debt.

Woody Heller, executive managing director of Studley's Capital Transactions Group, represented SL Green and SITQ in the sale of its interest.

Instant Insights /

CSFB Acquires 75% Interest in One Park Ave.

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