SL Green Sells Stake in One Madison; Other Non-Core Assets Also Trade

SL Green Realty announced a number of deals Monday morning, including the news it has sold a 25% stake in One Madison Ave., to an international investor.

The buyer has committed aggregate equity to the project totaling no less than $259.3 million. SL Green retained a 25.5% interest in the property, while its joint venture partners, the National Pension Service of Korea and Hines, retained their 49.5% interest. SL Green and Hines are co-developing the $2.3 billion project and have signed Chelsea Piers Fitness as the flagship retail tenant. One Madison Ave., is a 27-floor, 1.4 million square foot office tower currently under development that is expected to deliver in less than 23 months.

“New York City’s investment market remains resilient and the One Madison Avenue transaction demonstrates the strong appetite by institutional investors for trophy assets located in prime sub-markets,” said CEO Marc Holliday in prepared remarks. 

Non-Core Assets Trade Hands 

SL Green also announced the sale of two non-core assets. 

In one transaction, the REIT and its joint venture partner, Stonehenge, sold the leasehold interest in 1080 Amsterdam Ave. for $42.5 million. The transaction is expected to close in January 2022. 

The sale of the 82,250-square foot building is part of SL Green’s efforts to consolidate into “prime, core assets,” according to SVP  Harrison Sitomer. “As New York City’s residential market rebounds, we are pleased to be able to capitalize on this investment via a strategic disposition,” he said in prepared remarks.

1080 Amsterdam Ave. is a 20-story pre-war elevator building located just south of Columbia University’s campus, at the northwest corner of Amsterdam Avenue and West 113th Street on Manhattan’s Upper West Side. The property comprises 96 apartments and two commercial units, and recently underwent a redevelopment.

An Ackman-Ziff team including Marc Sznajderman, Andrew Sasson, Chad Sinsheimer, and Justin Bomba advised SL Green in the sale.

In another transaction, the REIT is selling its ownership interest in the office and garage condominiums at 110 East 42nd St., for $117.075 million to Meadow Partners, which is acquiring the property on behalf of a separately managed account. The transaction is expected to close by the end of 2021. 

This is another non-core asset for the REIT, which traded at an “attractive” cap rate, according to Sitomer. 

110 East 42nd Street is located across from Grand Central Terminal and SL Green’s One Vanderbilt Avenue. The office condominium, which comprises a portion of the ground floor and the sixth through eighteenth floors, was originally built in 1923. SL Green previously sold the office condominium in 2007 and assumed control of it again in 2011. The garage condominium was acquired in 2013.

Bloomberg Expands Lease By 191,207 SF 

The REIT also announced that Bloomberg LP has signed a 191,207 square foot expansion lease at 919 Third Ave., covering the entire 28th through 33rd floors. This expansion increases Bloomberg’s commitment at 919 Third Ave. to 748,415 square feet.

In addition, at One Vanderbilt Avenue, SL Green signed a new 19,522 square foot lease with Flexpoint Ford, a private equity firm, covering a portion of the 61st floor and a 6,554 square foot expansion lease with Stone Point Capital LLC covering a portion of the 50th floor. One Vanderbilt is now 92.7% leased.

Craig Reicher and Howard Fiddle of CBRE represented Bloomberg LP. Jared Horowitz of Newmark represented Flexpoint Ford. John Maher and Hugh MacDonald of CBRE represented Stone Point Capital while Robert Alexander, Ryan Alexander, Emily Chabrier and Alex D’Amario of CBRE represented the landlord in each transaction.

SL Green has signed 359,032 square feet of Manhattan office leases to date in the fourth quarter and 1,714,940 square feet of Manhattan office leases to date in 2021.