A Wachovia spokesperson tells GlobeSt.com that it is the company's policy not to comment on transactions and an SL Green spokesperson tells GlobeSt.com that they are not commenting at this time. An anonymous source did confirm to GlobeSt.com that "it is happening," referring to the sale.
[IMGCAP(2)]Hugh Finnegan, an attorney in the real estate group at Sullivan & Worcester LLP, who is not involved in building sale, tells GlobeSt.com that this deal is to generate capital. He explains that deals such as these will be a market trend because "financial institutions are looking for ways to improve their balance sheets."
Finnegan continues that this deal is "just like what Citibank did with the Greenwich Street property." Citigroup sold 388-390 Greenwich St. last December to SL Green and entered into a 15-year sale-leaseback, thus enhancing their balance sheet, at least in the short-term," he says. "Wachovia is looking to do something similar, with the obvious difference being that this is not a sale-leaseback. They are generating some cash in the short-term. Cash on balance sheets is what Wall Street is looking for right now."
As GlobeSt.com previously reported, Wachovia acquired its 85% controlling interest in the 21-story property from SL Green in July 2007 for $335 million, or $660 per sf. The property, located in Times Square South between 37th and 38th streets, was formerly wholly owned by SL Green. The 534,000-rentable-sf building was fully renovated by SL Green in 1999 and features a new lobby with entrances on Broadway and 38th Street and new elevator cabs.
Lanty Smith, Wachovia's chairman, who served as interim CEO before the hire of Robert Steel to the position of CEO and president last week, says that Wachovia will reveal its second quarter results on July 22. "Wachovia and the industry experienced continued deterioration in the mortgage and credit markets," he says in a prepared statement. "While it was a difficult quarter, we are pleased that Wachovia's capital and liquidity provide a solid foundation in the face of these challenges." However, Smith further notes that the firm expects to report an "after-tax loss available to common stockholders" of $2.6 billion to $2.8 billion for the quarter.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
