SL Green Recaps Two Herald Square and Expands Mercy College Lease

NEW YORK CITY—SL Green Realty Corp. obtained $150 million in first mortgage financing for 2 Herald Square, received from MUFG Union Bank, according to Real Capital Analytics. The real estate firm also sold a 49% stake in the property to an unnamed Israeli institutional investor.

In addition, SL Green signed four deals totaling 177,081 square feet, raising the building’s total occupancy to 93.2%.

Mercy College agreed to a 30-year leasehold condominium covering 95,370 square feet. Expanding from its existing 55,000 square feet, the school will occupy the building’s third, fourth and seventh floors. SL Green will also reconfigure the ground floor, creating a dedicated 34th Street lobby for Mercy.

WeWork has also signed a new lease to expand by 29,388 square feet. Amazon, as a WeWork client currently occupies 122,903 square feet, spanning the eighth through 11th floors and the penthouse. Following the lease expansion, WeWork will also have a new dedicated lobby with a 35th Street entrance.

In addition, retailers Victoria’s Secret recently extended its space and Happy Socks signed a new lease to open its store on Sixth Ave.

The recapitalization is part of a value-add capital program for the 369,000 square-foot office and retail property originally built in 1909. With the alternate address of 1328 Broadway, the 11-story building stands at the intersection of Sixth Avenue, Broadway and 34th Street.

“Following our successful acquisition of the leasehold at 2 Herald Square, we executed our business plan ahead of schedule by expanding existing tenants from within as well as adding a new tenant to our roster,” says Brett Herschenfeld, SL Green’s managing director at SL Green.

In May 2018, SL Green acquired Two Herald Square in a foreclosure auction from a group of investors led by Sitt Asset Management, for $266 million, according to Real Capital Analytics.