SL Green Tower Could Fetch $150M

NEW YORK CITY-SL Green Realty Corp. is marketing its 360,000-square-foot office property at 28 W. 44th St., which it bought in 2005. The marketing of the 92-year-old property was first reported by Real Estate Alert on Wednesday, it’s part of the office REIT’s long-term strategy of selling off assets that have reached maturity within its portfolio and then reinvesting in new acquisitions.

Acquired for $105 million in May ’05 from Transwestern Investments, 28 W. 44th is expected to draw bids of about $15 per square foot, or $149 million, Real Estate Alert reported Wednesday. It’s currently 93% leased.

“I think we’re one of the few REITs that sequentially and serially roll out mature properties, take gains, reinvest in some new buildings—we’ve done it throughout,” CEO Marc Holliday said during a conference call Tuesday discussing fourth-quarter 2010 results. Co-chief investment officer Isaac Zion noted 28 W. 44th an an example of this strategy.

Zion added that “we’ve created a lot of value” by upgrading the property's lobby. “But we feel now’s the time to bring that asset to market, and we feel we’ll got a lot of traction in the marketplace,” Zion said during Tuesday’s conference call.

During SL Green’s Investor Day presentation this past December, the REIT identified half a dozen assets, including 28 W. 44th, that could come to market in 2011 as either sales or joint ventures. “As the capital expenditures on these assets continue to rise and the current NOI growth isn’t quite there, it’s clearly time to prune those assets and deploy that capital into more accretive investments,” Zion said Tuesday.

Real Estate Alert reported that SL Green has tapped CB Richard Ellis to market the 22-story tower, also known as the National Association Building. About 100,000 square feet of leases signed in 2004 and ’05 are believed to be rolling over in the next five years, according to Real Estate Alert.

A spokesman for SL Green tells GlobeSt.com the company declines to comment beyond the remarks Holliday and Zion made during Tuesday’s conference call. This past September, the REIT sold the nearby Berkeley Building at 19 W. 44th St. to German-based Deka Immobilien for $123.2 million.