SL Green Increases 245 Park Ave. Investment and Makes Progress Downtown
The REIT now holds a greater interest in the Midtown building owned with HNA Group and moves forward in constructing its Financial District residential tower.
NEW YORK CITY—Raising the stakes, SL Green Realty Corp. has closed on the second phase of its preferred equity investment in 245 Park Ave. with HNA Group North America LLC, a subsidiary of the Chinese conglomerate HNA Group. SL Green’s investment in the property now totals $148.2 million. As part of the agreement the New York-based REIT will also serve as the property manager, in charge of operations and leasing.
SL Green made its initial investment in the second quarter of 2018. In May 2017, HNA Group acquired the property for $2.2 million from a joint venture of Brookfield Property Partners, Clarion Partners and the New York State Teachers’ Retirement System, according to Real Capital Analytics.
Built in 1967, the 1.8 million square-foot, 44-story tower was designed by Shreve, Lamb & Harmon Associates. Occupying the entire block between 46th and 47th streets, 245 Park Ave. is one of the largest buildings on Park Avenue. The property is currently 91% leased and includes as tenants Société Générale, Angelo Gordon, Rabobank and Ares Capital.
Benjamin Lambert, Evan Layne, and David Lazarus from Eastdil Secured represented HNA.
In other news, SL Green is making progress with construction at 185 Broadway, a ground-up, 31-story, 260,000 square-foot, mixed-use building in the Financial District.
Designed by the architecture firm FX Collaborative, the building will include approximately 209 rental apartments including studio, one-bedroom, two-bedroom and three-bedroom units. Of these, 30% totaling 63 units will be affordable. As part of the Affordable New York Housing Program, the project will receive a 35-year property tax abatement. The building will also include two floors of flagship retail and three floors of commercial space. The developer anticipates receiving a temporary certificate of occupancy in March 2021.
“We will be the first building to be constructed in Lower Manhattan under the city’s new Affordable New York Housing program,” says Brett Herschenfeld, managing director of SL Green. “We will deliver an iconic flagship retail store at the building’s base, directly in between the Fulton Transit Center and the World Trade Center, an opportunity which will certainly attract the very best global retailers.”
SL Green has reached three major milestones with clearing the land, and securing additional development rights and construction financing.
It has completed demolition of three parcels at 183 Broadway, 187 Broadway and 5-7 Dey St., and plans to complete the foundations in December 2019. The developer has also acquired 66,186 square feet of development rights from the owner of 189 Broadway. With this, SL Green obtained a light and air easement and cantilever right over 189 Broadway for the purpose of permitting lot line windows and maximizing residential floor plates.
SL Green also closed on $225 million in construction financing for 185 Broadway with United Overseas Bank Limited and Helaba. The floating rate facility has a term of three years, with two one-year extension options.
An Ackman-Ziff team of capital advisors led by Marc Sznajderman, Romano Tio and Simon Ziff represented SL Green in the financing.