SL Green is under contract to purchase two Midtown East sites in Manhattan for $160 million, where the developer hopes to consolidate them into a single building. This applies to both 11 East 44th Street and 346 Madison Avenue, both of which are adjacent to each other.
Both properties take up roughly 800,000 square feet of rentable space. SL Green said that the move will allow it to turn the two sites into a "best-in-class new building," hinting that office would be a focal point, along with amenities, as tenant demand remains strong for these elements.
“These assets are in an exceptional location just steps from One Vanderbilt," Harrison Sitomer, chief investment officer at SL Green, said in a statement.
"As we continue to prioritize well-located opportunities in our core sub-markets, these properties provide us the opportunity to pursue a world-class, ground-up new office development in the heart of the strongest office market in the country. We look forward to capitalizing on this unique investment to unlock its long-term value."
It's unclear if the potential new building would include other asset classes like retail or residential.
Currently, the office fundamentals in Manhattan couldn't be more robust. In fact, the borough's office sector is poised to have its best year of leasing in six years after posting roughly 3.01 million square feet in signings during July, according to a report from Colliers. Currently, availability rates in the market are at the lowest levels since January 2021.
Along with One Vanderbilt, Manhattan's largest office landlord manages other major properties in the borough, including One Madison Avenue, 100 Church Street and 100 Park Avenue. As of June, SL Green operated 53 buildings, spanning 30.7 million square feet. Of which, 27.2 million square feet is owned in Manhattan.
It's also worth noting that in July, SL Green raised more than $1 billion from a debt fund, which it plans to deploy across distressed real estate loans concentrated in New York City.
JLL advised SL Green on the 11 East and 346 Madison buys.
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