SL Green/Ivanhoe to Sell NYC Office Condo for $633M
Along with Westchester office property sales, the transactions are expected to generate net proceeds to SL Green of approximately $190 million.
NEW YORK CITY—SL Green Realty Corp. and partner Ivanhoe Cambridge have entered into a contract for their leasehold office condominium at 1745 Broadway for $633 million.
SL Green reports the contract for multiple floors totaling 674,000 square feet at the 930,000-square-foot mixed-use property is with an institutional client of Invesco Real Estate and calculates out to $939-per-square-foot.
In deals separate from Ivanhoe Cambridge, SL Green also reports it has entered into contracts for the sale of two Westchester County office properties—115-117 Stevens Ave. in Valhalla and the Reckson Executive Park in Rye Brook for approximately $67 million. SL Green did not disclose the identity of the prospective buyers of the two suburban office properties. Eastdil Secured represented SL Green in the 1745 Broadway transaction. CBRE represented SL Green in the suburban asset sales deals.
The transactions are expected to generate combined net proceeds to SL Green of approximately $190 million, which will be used for the company’s $1.5-billion stock repurchase program. To date, SL Green has repurchased a total of 12,258,203 shares.
The sales of 1745 Broadway and 115-117 Stevens Ave. are expected to close in the second quarter of 2018, while the sale of Reckson Executive Park is expected to be completed in the third quarter of this year.
1745 Broadway occupies the entire block front between 55th and 56th streets and the SL Green-Ivanhoe Cambridge condo space there is currently 100% leased.
In 2016, Penguin Random House signed a lease extension for 603,650 square feet through June 2033 covering floors 2-19 and 21-23 at the 50-story office tower at 1745 Broadway. SL Green and Ivanhoe Cambridge own floors 2 through 26 at the building. Financial services firm PDT Partners, LLC is the other tenant at the SL Green-Ivanhoe condo space.
“After securing a long-term lease extension with investment grade tenant, Random House, and stabilizing the asset, we determined that this was the right time to monetize our success with the property and redeploy that capital into more accretive investment opportunities, including our share repurchase program,” states SL Green’s co-chief investment officer David Schonbraun.
115-117 Stevens includes two office buildings totaling 178,000 square feet and Reckson Executive Park at 1-6 International Drive, consists of six office buildings totaling 540,000 square feet of office space.
SL Green co-chief investment officer Isaac Zion describes the sale of the two Westchester County office properties as a continuation of the company’s divestment of non-core assets