SL Green Reports Increased Leasing Activity at Year End 2009
February 25th, 2010 at 3:22 PM
Transaction Momentum Carries into 2010 as New and Existing Tenants Make Long-Term Commitments
BMW of Manhattan Signs Long-Term Renewal for 228,000 Square Feet
Aeropostale Inks Agreement to Anchor Retail Repositioning at 1515 Broadway
Suburban Portfolio Leasing Volume Also Shows Signs of Strength
New York, NY - January 26, 2010 - SL Green Realty Corp. (NYSE: SLG) today reported increased leasing activity during the fourth quarter of 2009, as the Company signed 48 leases totaling more than 560,000 square feet in its New York City portfolio. Leading the way was the 10-year, 228,000-square-foot early renewal of BMW of Manhattan, Inc. at 555 West 57th Street.
Also highlighting the fourth quarter were a 10-year, 75,000-square-foot new lease with DE Shaw Research, LLC covering seven floors at Tower 45, located at 120 W. 45th Street and an 11-year, 33,000 square foot expansion with Debevoise & Plimpton, LLP at 919 Third Avenue. Both transactions pre-lease spaces that were scheduled to become vacant in 2011.
Additionally, SL Green announced the completion of a 15-year retail lease with Aeropostale. The prominent teen apparel retailer is taking over 17,500 square feet at 1515 Broadway, combining ground floor space previously leased by Bank of America together with 2nd floor space previously occupied by MTV Studios.
"When we recaptured the former MTV studio space from Viacom, we recognized this as a unique opportunity to create high visibility retail space and unlock tremendous rental value," said Andrew Mathias, President and Chief Investment Officer of SL Green. The transaction required the simultaneous buyout of Bank of America who controlled a long-term lease on the space. Our extensive efforts were well worth it, as this new lease with Aeropostale anchors the building's retail repositioning with additional opportunity for further value creation in the remaining space and signage."
"The New York City office market got off to a slow start in 2009," noted Steven Durels, Executive Vice President, Director of Leasing and Real Property for SL Green. "However, we definitely saw a steady improvement in transaction velocity as 2009 progressed. Direct vacancy has stabilized and quality sublease availability is shrinking."
There were 2.25 million square feet leased in Manhattan during the month of December according to Cushman & Wakefield, Inc. The last two times monthly leasing activity exceeded 2 million square feet was in July 2009 and June 2008.
"Likewise, we are seeing an increasing number of in-place tenants with expirations beyond 2010 initiating longer-term renewal and expansion discussions," said Durels. "It appears that many companies realize the market is beginning to bottom-out and are fearful that rents will rise before their leases expire. These early renewals like the BMW transaction permit us to substantially reduce our near-to-mid term portfolio rollover."
Overall, Durels reported that the Company signed 191 Manhattan leases covering more than 1,480,000 square feet for the full year. In addition, the Company's Reckson division, which manages its suburban portfolio in Westchester and Connecticut, reported 29 deals topping 346,000 square feet. This included a renewal with Verizon for approximately 117,000 square feet and a new lease with Gerald Metals for approximately 23,250 square feet.
SL Green Realty Corp. is a self-administered and self-managed real estate investment trust, or REIT, that predominantly acquires, owns, repositions and manages Manhattan office properties. The Company is the only publicly held REIT that specializes in this niche. As of December 31, 2009, the Company owned interests in 29 New York City office properties totaling approximately 23,211,200 square feet, making it New York's largest office landlord. In addition, at December 31, 2009, SL Green held investment interests in, among other things, eight retail properties encompassing approximately 374,812 square feet, three development properties encompassing approximately 399,800 square feet and two land interests, along with ownership interests in 31 suburban assets totaling 6,804,700 square feet in Brooklyn, Queens, Long Island, Westchester County, Connecticut and New Jersey.
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