SL Green Finalizes Purchase of 11 Madison Ave. Building for $2.6B
NEW YORK CITY — SL Green Realty Corp. (NYSE: SLG) has completed the purchase of the 11 Madison Ave. office building in New York for $2.6 billion, which includes $300 million in costs associated with improvements to the property. The acquisition has been financed with $1.4 billion of 10-year, interest-only, fixed-rate financing at a rate of 3.8 percent annually.
The 29-story Art Deco-style building serves as the U.S. headquarters for Sony and Credit Suisse AG. It spans 2.3 million square feet and is located between East 24th and 25th streets. CBRE’s Darcy Stacom and Bill Shanahan brokered the transaction. The seller is a partnership of the Sapir Organization and the CIM Group.
SL Green funded acquisition of the iconic property through a combination of property sales, joint ventures, new financing and existing property debt refinancings, while retaining cash for other investments in the pipeline.
The company previously sold Tower 45, a 440,000-square-foot office building at 120 W. 45th St., for $365 million. SL Green also previously sold 80 percent of its ownership interest in a 73,000-square-foot mixed-use asset located at 131-137 Spring St. in SoHo to Invesco Real Estate.
SL Green will retain a 20 percent ownership interest in the SoHo property and will continue to manage and lease the asset. That transaction was valued at $277.8 million. The proceeds from both sales were used to partially fund the acquisition of 11 Madison Ave.
“As illustrated by these transactions, the demand for high-quality commercial assets in the Manhattan market continues to be very strong, even as interest rates have risen in recent months,” Andrew Mathias, SL Green’s president, said upon closing the previous transactions. “After repositioning both of these assets to unlock additional value, we will realize in excess of $400 million of net cash proceeds from these transactions, which were executed at a blended cap rate of 3.3 percent.”
Based in New York City, SL Green is a publicly held REIT that acquires, owns, repositions and manages Manhattan office properties. It is an S&P 500 company and New York City’s largest office landlord. The company’s stock price closed Tuesday, Aug. 18, at $116.69 per share, up from $110.96 one year ago.
— Haisten Willis