Strategic Transactions Moving Forward in a Strong Market
NEW YORK–(BUSINESS WIRE)–
SL Green Realty Corp. (NYSE:SLG), an S&P 500 company and New York City’s
largest commercial property owner, today announced two transactions with
an aggregate value of $642.8 million:
1) An agreement to sell Tower 45, the office building located at 120
West 45th Street, for $365.0 million, or approximately $830
per square foot; and
2) The formation of a joint venture with Invesco Real Estate (“Invesco”)
for the ownership of 131-137 Spring Street, a 73,000 square foot
mixed-use asset located in SoHo. Under the terms of the agreement,
Invesco will acquire an 80 percent stake in the property, with SL Green
retaining a 20 percent ownership interest as well as management and
leasing responsibilities. The transaction values the property at $277.8
million.
Both transactions are expected to be completed in the third quarter,
subject to customary closing conditions.
SL Green President Andrew Mathias commented, “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. After re-positioning both of these assets
to unlock additional value, we will realize in excess of $400.0 million
of net cash proceeds from these transactions, which were executed at a
blended cap rate of 3.3 percent.
He continued, “Our intention is to fund the Company’s pending
acquisition of the iconic 11 Madison property through a strategic
combination of property sales, joint ventures, new financing and
existing property debt refinancings, while retaining substantial cash
for other investments in the pipeline. These transactions announced
today are consistent with that plan.”
The 440,000-square-foot Tower 45 was acquired by SL Green in 2007 as
part of the merger with Reckson Associates. Subsequently, the Company
executed a significant capital improvement program that successfully
repositioned the property. Tower 45 is currently 96.2% leased. Richard
Baxter of Jones Lang LaSalle and Darcy Stacom of CBRE represented SL
Green on this transaction.
131-137 Spring Street, a six-story building in the heart of the popular
SoHo shopping district, features 100 feet of ground floor frontage on
Spring Street and houses the multi-level flagship stores for Diesel and
Burberry while the balance of the building includes office space and
residential rental units.
Isaac Zion, co-Chief Investment Officer of SL Green, commented, “These
transactions fit perfectly with the acquisition of 11 Madison, which is
well-leased for the long term and located in one of New York City’s
strongest commercial office submarkets. As we indicated at our December
Investor Conference, we expected to sell certain assets and create joint
ventures for others during 2015 and deploy the proceeds into more
accretive opportunities. Clearly, the pieces are coming together nicely.”
He added, “Not to be overshadowed by the bigger strategic picture — we
are very pleased to be forming this new venture with Invesco in SoHo. We
hold the Invesco real estate investment organization in extremely high
regard and their New York team shares our vision for this prime asset.
We look forward to working with them in an effort to create even greater
value in this incredibly well-positioned property, taking full advantage
of its deeply embedded growth potential as the area’s positive momentum
continues.”
About SL Green Realty Corp.
SL Green Realty Corp., an S&P 500 company and New York City’s largest
office landlord, is a fully integrated real estate investment trust, or
REIT, that is focused primarily on acquiring, managing and maximizing
value of Manhattan commercial properties. As of March 31, 2015, SL Green
held interests in 117 Manhattan buildings totaling 43.6 million square
feet. This included ownership interests in 29.0 million square feet of
commercial buildings and debt and preferred equity investments secured
by 14.6 million square feet of buildings. In addition to its Manhattan
investments, SL Green held ownership interests in 37 suburban buildings
totaling 5.9 million square feet in Brooklyn, Long Island, Westchester
County, Connecticut and New Jersey. For more information, please visit: https://slgreen.com/
About Invesco Real Estate
Established in 1983, Invesco Real Estate manages $64.1 billion of
real estate investments, including $36.1 billion in direct real estate
investments and $28 billion in real estate securities (as of March 31,
2015). With more than 400 employees in 20 offices worldwide, the
Dallas-based group focuses on top-down market and property fundamentals
combined with bottom-up local market intelligence. Senior members
of the management team have worked together for more than 25 years,
contributing to the consistent implementation of Invesco’s investment
strategy and resulting performance. Additional information is available
Forward-looking Statement
This press release includes certain statements that may be deemed to
be “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 and are intended to be covered
by the safe harbor provisions thereof. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that we expect, believe or
anticipate will or may occur in the future, are forward-looking
statements. Forward-looking statements are not guarantees of future
performance and we caution you not to place undue reliance on such
statements. Forward-looking statements are generally identifiable by the
use of the words “may,” “will,” “should,” “expect,” “anticipate,”
“estimate,” “believe,” “intend,” “project,” “continue,” or the negative
of these words, or other similar words or terms. Forward-looking
statements contained in this press release are subject to a number of
risks and uncertainties, many of which are beyond our control, that may
cause our actual results, performance or achievements to be materially
different from future results, performance or achievements expressed or
implied by forward-looking statements made by us. Factors and risks to
our business that could cause actual results to differ from those
contained in the forward-looking statements are described in our filings
with the Securities and Exchange Commission. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as
a result of future events, new information or otherwise.
SLG-A&D
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SL Green Realty Corp.
Andrew Mathias
President
-or-
Matt
DiLiberto
Chief Financial Officer
212.594.2700
Source: SL Green Realty Corp.
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