SL Green Scoops Up Midtown Office Property in Leaseback Deal
The deal includes a partial lease-back of 40,000 square feet to the current tenant and seller affiliate KCP Holdco, Inc. for its headquarters.
NEW YORK CITY- SL Green Realty Corp., a real estate investment trust headquartered in New York City, has acquired 603 West 50th St. in Manhattan, a six-story, 160,000-square-foot office property. The transaction is dated to close in an estimated 90 days and subject to customary closing conditions.
The deal includes a partial lease-back of 40,000 square feet to the current tenant and seller affiliate KCP Holdco, Inc. for its headquarters. SL Green will execute a thorough reposition of the property to modernize it. Proceeds from SL Green’s disposition of 1010 Washington Boulevard in Stamford, CT, that is under contract for $23 million, will go toward the acquisition of 603 West 50th St.
“It is important to us that we choose an owner that has the necessary experience to renovate and manage the property at a high caliber, particularly since we will continue to call 603 West 50th St. our headquarters,” said Marc Goldfarb of KCP Holdco, Inc., in a prepared statement.
Constructed in 1940, 603 West 50th St. is located on 11th Avenue, along the entire block between 50th and 51st streets. The prewar building’s industrial aesthetic will receive an upgrade to its timber construction, large windows, wood floors and beams, brick perimeter walls and floors ranging between 22,000 to 28,000 rentable square feet.
“With the strategic capital investment, we will transform an underdeveloped property into a competitive Class-A building that will attract companies across industries, particularly businesses in the creative industries,” said Harrison Sitomer, senior vice president of SL Green, in a prepared statement.
Recently, SL Green has repositioned its portfolio by exiting non-core assets to redirect capital into higher-quality office assets that present upside potential or into it shares buyback program. In early October, the REIT launched a campaign for one or more business partners to assume a 40% to 45% stake in its office development at One Madison Avenue in Midtown South, where the company is going to redirect the capital to either a future acquisition or its buy back shares.