SL Green Realty Corp. is adding more to its New York office footprint. The landlord announced that it is paying $730 million to acquire Park Avenue Tower from Blackstone, a site located in Midtown Manhattan.
SL Green refers to the 36-story Class A building as "one of the most modern assets in the submarket." Adding to the appeal are the recent upgrades, which include the redesigned plaza, office suites, a lobby and more amenities.
Harrison Sitomer, chief investment officer at the New York-based firm, said that the property that sits between 55th and 56th Streets will "deliver sustainable cash flow and provide long-term value creation."
“Park Avenue Tower is strategically located and well-leased at below-market rents, offering significant upside as vacancy in the Park Avenue corridor continues to trend below 6 percent," he further noted.
"We are excited to add another exceptional property to our Park Avenue portfolio that includes One Vanderbilt Avenue, 500 Park Avenue, 450 Park Avenue, 280 Park Avenue, 245 Park Avenue, 125 Park Avenue and 100 Park Avenue.”
Eastdil Secured represented Blackstone on the deal.
Additionally, while none were bigger than the acquisition — SL Green made two other announcements today. One of them was relating to year-to-date leasing at its Manhattan office portfolio, with a total of 1.92 million square feet in signings executed. Some of the biggest leases across its portfolio were signed at One Madison Avenue, including Harvey AI Corp.'s 10-year deal to take 92,663 square feet, Sigma Computing, Inc. signing for 64,077 square feet for 10 years and an undisclosed financial services firm took 92,663 square feet over a 10-year term. All together, that brings SL Green's One Madison occupancy to 91.2 percent.
Steven Durels, SL Green’s executive vice president, director of leasing and real property, said that tenant demand is particularly strong in Midtown South and Midtown.
“Rents are rising as supply tightens in both of these submarkets, with particular strength in the Park Avenue and Sixth Avenue corridors," he highlighted.
The other piece of news was Mori Building Co., Ltd, buying an additional five percent stake in One Vanderbilt Avenue. That follows the move last November, when SL Green sold off 11 percent of the trophy asset to Mori. With both investments totaling $4.7 billion, SL Green will maintain 55 percent equity control in the property.
Moreover, SL Green has made other big moves in NYC this year. Last month, the REIT refinanced a loan on its 11 Madison Avenue office tower for $1.4 billion. And in July, the company announced that it had raised over $1 billion for a fund focused on acquiring distressed real estate loans across the metro.
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