SL Green Realty secured financing totaling $177 million for its 800 Third Ave. property.

NEW YORK CITY—SL Green Realty Corp. reports it has closed on two refinancing transactions for office properties in Manhattan and Long Island and secured construction financing for work at a small retail property on Seventh Avenue here.

The three transactions involve initial financing that approaches $300 million. The company, while reporting financing terms of the respective deals, did not divulge the sources of the financing arrangements.

SL Green, along with its joint venture partners, closed on the refinancing of 800 Third Ave. The new 10-year, $177-million mortgage loan features a fixed interest rate of 3.17%, subject to up to a 20-basis-point increase under certain conditions, the company states.

The new refinancing deal replaces a previous $20.9-million mortgage that was set to mature in August 2017. SL Green received approximately $89 million in net proceeds from the transaction. In March 2015, SL Green acquired additional ownership interests in the 526,000-square-foot office building. The company, which originally acquired a stake in 800 Third Ave. in 2006, increased its ownership percentage to 60.5% as a result of the transactions.

Fried Frank acted as counsel to SL Green in the refinancing of its joint venture interest in 800 Third Ave. The Fried Frank team included real estate partner Jonathan L. Mechanic, corporate partners Julian S.H. Chung and Robert M. McLaughlin; corporate special counsel Michael T. Gershberg; tax special counsel Andrew Falevich; real estate associates Maura K. Gallagher and Ross M. Wasserman and executive compensation & employee benefits associate Andrea L. Pollak.

SL Green, along with its joint venture partners, also completed the recapitalization of Jericho Plaza in Jericho, NY by securing a new two-year floating rate mortgage with an interest rate of 4.15% over LIBOR. The loan deal includes three one-year extension options. SL Green reports that the initial funding was approximately $75 million with a total expected funding of $100 million. The refinancing closed simultaneously with a series of transactions culminating in the property being owned in a new venture that continues to include SL Green and Onyx Equities, along with other partners.

The recapitalization will allow the ownership venture to put in place a capital improvement plan that includes lobby and elevator cab renovations, the addition of a conference facility, and landscaping upgrades to the property.

SL Green, which owns an 11.67% non-controlling interest in the venture, received approximately $8.4 million in net proceeds from the refinancing and will continue to share management and leasing responsibilities with Onyx Equities.

Back in 2007, SL Green purchased 1 and 2 Jericho Plaza in Long Island for $210 million. Onyx Equities partnered with SL Green in the $328-per-square-foot acquisition.

SL Green also secured construction financing of a retail development site at 719 Seventh Ave. The two-year $44-million loan features a floating interest rate of 3.05% over LIBOR, with the ability to reduce the spread to 2.55%, the company states. The loan includes one, one-year extension option. SL Green owns a 75% interest in the property.

The firm received approximately $21 million in net proceeds at the closing of the transaction, with the balance of the loan proceeds being used to complete the construction of the 10,000-square-foot retail space that the company states will become a prime retail flagship location. Construction on the property, which will include extensive LED signage, is estimated to be completed before this year's holiday season.

“The successful completion of these transactions provides evidence that liquidity continues to be available for high-quality borrowers. The refinancings of 800 Third and Jericho (Plaza) represent another stride in our effort to extend the term of secured debt maturities, reduce cost and generate incremental proceeds,” states SL Green president, Andrew Mathias. He adds that the construction financing for its 719 Seventh Ave. asset “speaks to SL Green's ability to recognize value and lock in low borrowing rates for a property set to benefit from its prime retail location.”

Back in 2007, SL Green purchased 1 and 2 Jericho Plaza in Long Island for $210 million. Onyx Equities partnered with SL Green in the $328-per-square-foot acquisition.

Instant Insights /

SL Green Inks Three NYC Area Financing Deals

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