Gramercy Closes on $390M in SL Green Deals

NEW YORK CITY-Gramercy Capital Corp. said late Monday it had closed on $390.8 million worth of previously announced investment sales to SL Green Realty Corp., including a 45% joint venture stake in the leased fee of the office tower at 885 Third Ave., better known as the Lipstick Building. The three deals combined produced approximately $89.8 million of unrestricted cash for Gramercy and approximately $39.0 million of restricted cash for one of its three CDOs, the company said.

When the sales were announced in early December, Gramercy CEO Roger M. Cozzi said in a statement, “These transactions enable us to monetize several non-controlling co-investment positions, produce a substantial increase in our corporate liquidity and further deleverage Gramercy’s balance sheet.” He added, “We’re pleased to reach agreement on transaction terms that help Gramercy achieve its short and long-term objectives.”

Along with the Lipstick Building stake for which SL Green is paying $39.3 million and assuming $120.4 million in mortgage debt, the other sales entail SL Green taking 100% ownership of the leased fee of 2 Herald Square via a $25.6-million acquisition plus the assumption of $86.1 million in debt and buying the entire leased fee interest in 292 Madison Ave. for approximately $19.2 million, plus assumed mortgage debt of $59.1 million.

For SL Green, the deals round off an active year of Manhattan acquisitions and sales. In August, the company closed on the acquisition of 125 Park Ave. for $330.0 million, assuming $146.25 million of in-place financing. The following month, SL Green sold its office building at 19 W. 44th St. for $123.2 million and realized a gain on the sale of approximately $35.5 million.

In May, SL Green sold its 45% beneficial interest in 1221 Ave. of the Americas for $577.4 million to the Canada Pension Plan Investment Board. At the same time, a JV of SL Green and CPPIB acquired 600 Lexington Ave. for $193 million.  The REIT began the year by assuming full ownership of 100 Church St. after foreclosing on the senior mezzanine debt on the one-million-square-foot office tower.