SL Green Sells Three NYC Properties; to Net $240M

NEW YORK CITY—SL Green Realty Corp. reports it has reached separate agreements to sell 2 Herald Square and 180 Broadway, and has closed on the sale of the development properties at 985-987 Third Ave. The three transactions will generate net cash proceeds to the REIT of $240 million.

SL Green says it will sell the leased fee interest in 2 Herald Square for $365 million. The sale of the leased fee interest, which is improved with an existing 11-story 365,000 square foot commercial office building, is expected to close during the fourth quarter of 2014. SL Green acquired the leased fee interest in 2 Herald Square in a joint venture partnership in 2007 and fully consolidated its position in 2010. Steven Kohn of Cushman & Wakefield represented SL Green in the transaction.

SL Green and partner Jeff Sutton, have reached an agreement to sell all their interests, including their fee position and retail condominium unit, in a mixed-use college dormitory/retail asset at 180 Broadway for $222.5 million. This transaction is expected to close during the third quarter of 2014. The property features three floors of retail space, leased to Urban Outfitters and TD Bank, as well as a Pace University ground lease condominium unit containing dormitory rooms serving 608 Pace students. Adam Spies of Eastdil Secured acted on behalf of SL Green in this transaction.

The company also reports it has closed on the sale of its development properties at 985–987 Third Ave. for $68.7 million. The sale was made in conjunction with the sale of an adjacent parcel the company SL Green not own. The total amount paid for the combined development site, plus development rights, was $100 million. In December 2012, SL Green acquired 985-987 Third Ave. After subsequently acquiring development rights from neighboring properties in separate transactions in 2013 and 2014, SL Green then joined with the neighboring owner to market the combined properties. Robert Knakal of Massey Knakal acted on behalf of the sellers.

In its announcement, SL Green Realty did not identify the prospective buyers in any of the transactions.

Andrew Mathias, president of SL Green, says of the New York City asset sales, “While the strategic approach for each of these investments varied, we had one goal in mind: creating shareholder value. I am very pleased to say that with each of these transactions, we've successfully demonstrated our ability to identify, create, and harvest significant value. Our combined IRR across these three deals is in excess of 21%.”