NEW YORK CITY-The Moinian Group’s repositioning of the formerNewsweek building at 1775 Broadway, threatened with foreclosure,has found a white knight in the form of SL Green Realty Corp. Thedeveloper and the REIT announced late Monday that they had formed ajoint venture to recapitalize the Midtown office property nearCentral Park, which Moinian is redeveloping as 3 ColumbusCircle.

|

According to a release, SL Green will make funds available forpaying off the $274.7-million mortgage and completing therepositioning and lease-up of the property, now largely vacant.Moinian will direct the completion of 3 Columbus Circle’s$175-million redevelopment, which includes recladding the83-year-old, 768,565-square-foot tower with a glass exterior.Citing an unnamed source, Bloomberg reported that the deal callsfor Moinian to cede 49% control of the property to SL Green.

|

In a statement, SL Green CEO Marc Holliday says his company hasworked with Moinian’s chairman and CEO, Joseph Moinian, “on severalhighly successful transactions, and look forward to teaming up withhim to complete the 3 Columbus Circle redevelopment project,delivering it to the market and leasing it up.” Moinian calls theoffice REIT, Manhattan’s largest landlord, “the ideal partner witha strong leasing track record in Manhattan.” A Moinian spokesmantells GlobeSt.com the company has no further comment at themoment.

|

The JV between Moinian and SL Green appears to prevent atakeover of the property, on which a partnership of the RelatedCos. and a Deutsche Bank unit bought the debt earlier this year.According to court documents filed in New York State Supreme Courtlast month, the partnership sought to foreclose on 3 ColumbusCircle after Moinan missed payments. Moinian had acquired 1775Broadway in 2004.

|

The New York Post, which first reported last month thatMoinian and SL Green were in talks, said that Related had plannedto demolish the 26-story tower after foreclosing on it, paving theway for a modern residential structure that would have included aNordstrom department store at its base. A spokeswoman for Relatedtells GlobeSt.com the company has no comment on the Moinian/SLGreen deal.

|

In other news, SL Green on late Monday reported third-quarterfunds from operations of $1.86 per share, compared to 98 cents pershare the year prior. Net income for the quarter rose to $1.42 pershare from a loss of three cents per share in Q3 2009; the REITattributed the gain in part to its $280.5-million sale of 510Madison Ave. to Boston Properties, which resulted in repayment ofthe debt on the property.

|

In December ‘09 and February of this year, SL Green had boughtthe first mortgage loan and senior mezzanine loan on 510 Madison,with a then-outstanding aggregate balance of $249.3 million, for$180.5 million. The sale to BXP resulted in an unleveraged IRR of55%, according to SL Green.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.