SL Green, Sutton Pay $40M for Leaseholds

(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)

NEW YORK CITY-Locally based SL Green Realty Corp., in a joint venture with developer Jeff Sutton, has acquired interests in two Manhattan retail buildings. They purchased a 90% leasehold stake in 1604 Broadway, a 41,100-sf space in Times Square, for about $21 million, as well as the leasehold interest in the 67,000-sf 379 West Broadway, a mixed-use building in SoHo, for about $20 million, according to industry sources. The Times Square building is owned by Conseco Life Insurance Co., and a group called 379 West Broadway Associates has ownership of the SoHo property, according to city documents.

SL Green executives plan to reposition and add value to the retail space at 1604 Broadway, says Andrew Mathias, chief investment officer of the company. The space is now home to Sbarro fast-food restaurant. The second floor had been occupied by Noche, a short-lived restaurant.

The five-story 379 West Broadway property, which has frontage on that road as well as Wooster Street, has Polo Ralph Lauren and fashion retailer Morgane LeFay. The building’s largest office tenants are Two Sigma Investments LLC and Sotheby’s International Realty Inc.

Both properties are examples of SL Green’s efforts to expand its retail holdings. The firm, mainly an office-asset holder with 18.2 million sf around the city, now holds 173,000 sf of retail in five buildings.

This is not the first deal SL Green and Sutton have done this year. In July,the partners acquired interests in four buildings in two separate deals for $162.5 million. One of the deals, adjoining buildings at 1551 and 1555 Broadway, at 46th Street, is also in the Times Square area and used to house a long-time Howard Johnson’s restaurant.

Last month SL Green and partner SITQ, a subsidiary of the Caisse de depot et placement du Québec, acquired a three-year loan on their 1515 Broadway building, which is the headquarters of Viacom, for $625 million. Since buying the building in 2002, the partners have repositioned its ground-floor retail, adding AEG Live’s Nokia Theatre, Bank of America and surf store Billabong.