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NEW YORK CITY-SL Green Realty Corp. acquired an interest in 19 West 44th St. for $91.2 million, or approximately $314 per sf, from its partner the City Investment Fund. The transaction gives the REIT majority ownership and control of the asset, which is also known as the Berkeley Building.

In March 2004, the joint venture acquired the 292,000-sf office for $67 million from EBS Forty Fourth Property Associates LLC. At that time Andrew Mathias, SL Green’s chief investment officer, said the firm was attracted to the site located between Fifth Avenue and Avenue of the Americas because they had previously owned property on the same street and were aware of its potential. “It’s a unique block,” he told GlobeSt.com. “With the university clubs and the Royalton, it’s more like an avenue than a side street.”

The company does like the block because in February it acquired 28 West 44th St., located across the street. Both properties are within two blocks of Grand Central Station and company officials feel the acquisitions enhance its “dominant presence” in the Grand Central submarket with 14 properties totaling more than seven million sf.

“This transaction offered us an opportunity to increase our presence in Midtown at an attractive off-market price that is further enhanced by the joint venture structure in which the property was previously owned,” Matthias says. “We look to further capitalize on the economies of scale which our growing local portfolio provides.” That portfolio now consists of 29 properties aggregating approximately 18.7 million sf.

Space at the site is advertised in the mid to upper $30s per sf with retail space going for $135 per sf. Tenants include New York Sports Club, Investors Business Daily and Writers & Artists Agency.

Pursuant to the terms of the initial joint venture agreement, SL Green would have been entitled to an incentive fee of approximately $7.3 million upon a sale of the property. With the interests being acquired by the REIT, that incentive fee income will be deferred and reflected as a reduction to the company’s basis in the property to approximately $79.2 million or $272 per sf. The company’s going-in capitalization rate on the acquisition is approximately 8.3%. In addition, SL Green originated a loan secured by CIF’s remaining ownership stake and CIF granted SL Green an option to purchase CIF’s remaining equity interest.

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