SL Green, Ivanhoe Agree to Sell Office Condo Portion of Tower in Manhattan for $633M
NEW YORK CITY— SL Green Realty Corp. (NYSE:SLG) and joint venture partner Ivanhoé Cambridge have agreed to sell their office condominium space at 1745 Broadway in Manhattan for $633 million.
The 930,000-square-foot tower includes retail spaces, offices and residential condominiums. SL Green and Ivanhoé will sell their portion of the property, totaling 674,000 square feet and spanning floors two through 26, to an institutional client of Invesco Real Estate.
In deals separate from Ivanhoé Cambridge, SL Green also agreed to sell two suburban office properties in New York —115-117 Stevens Ave. in Valhalla and Reckson Executive Park in Rye Brook — to two different buyers for a combined price of $67 million.
The transactions are expected to generate combined net proceeds to SL Green of approximately $190 million, which will be used toward the company’s $1.5 billion stock repurchase program. To date, SL Green has repurchased a total of 12.3 million shares.
“We continue to make strategic divestments of non-core assets to both support the stock repurchase program and strengthen our portfolio,” says Isaac Zion, co-chief investment officer of SL Green.
1745 Broadway occupies the entire block front between 55th and 56th streets and is located three blocks from Central Park and Columbus Circle. The portion owned by the SL Green/Ivanhoé partnership is fully leased to publishing company Penguin Random House and financial services firm PDT Partners LLC.
In 2016, Random House signed a lease extension for 603,650 square feet through June 2033 at the tower.
“After securing a long-term lease and extension with an investment-grade tenant, Random House, and stabilizing the asset, we determined that this was the right time to monetize our success with the property and redeploy that capital into more accretive investment opportunities, including our share repurchase program,” says David Schonbraun, co-chief investment officer at SL Green.
The office property at 115-117 Stevens includes two office buildings totaling 178,000 square feet. Reckson Executive Park comprises six office buildings and totals 540,000 square feet.
Eastdil Secured represented SL Green in the 1745 Broadway transaction, and CBRE represented SL Green in the suburban asset sales. The sales of 1745 Broadway and 115-117 Stevens are expected to close during this quarter, while the sale of Reckson Executive Park is expected to close in the third quarter of 2018.
As of Dec. 31, 2017, SL Green held interests in 121 Manhattan buildings totaling 50 million square feet, and interest is 25 suburban buildings totaling 3.7 million square feet in Brooklyn, Long Island, Westchester County and Connecticut.
Vertically integrated in Canada, Ivanhoé Cambridge held more than 60 billion Canadian dollars in assets as of Dec. 31, 2017.
— Camren Skelton