SL Green acquires 450 Park Ave for $445M
SL Green Closes Manhattan’s Third-Largest Office Deal This Year
June 29, 2022 | 6:53 P.M.
SL Green Realty, Manhattan’s largest office landlord, has closed its first office purchase since 2018 with financing provided by a bank group led by Wells Fargo.
The lending group provided a $267 million senior mortgage financing, SL Green said Wednesday in a statement.
SL Green first said in April it agreed to buy the midtown Manhattan tower on New York’s corporate headquarters-heavy Park Avenue, at 450 Park Ave. at the corner of 57th Street and Park Avenue for $445 million.
The New York real estate investment trust said Wednesday the 33-story building’s new ownership, in a recently formed joint venture, consists of institutional investors from South Korea and Israel. SL Green said it retained a 25.1 percent interest in the property and will oversee leasing and management of the building on behalf of the partnership.
“The international demand to partner with us on the acquisition of 450 Park Avenue demonstrates that New York City continues to maintain its position as one of the most sought-after real estate markets and a safe haven for long-term capital deployment,” SL Green Chief Investment Officer Harrison Sitomer said in the statement. “The acquisition of this world-class asset is a meaningful enhancement to our growing investment management platform.”
While there are concerns that higher interest rates may be beginning to slow dealmaking and shift acquisition strategies in the commercial real estate market, SL Green Chief Financial Officer Matt DiLiberto recently said in an interview that quality properties won't have that problem.
“There’s a view out there that with the choppy financing market and rising interest rates that people can’t get deals done,” he told CoStar recently. What 450 Park "shows is there’s a financing market that’s out there for good assets with good sponsorship.”
SL Green's purchase of the property ranks as one of the largest office transactions the city has seen since the onset of the pandemic and the third largest so far this year, according to CoStar data.
Designed by Emery Roth & Sons, 450 Park Ave. includes high-end boutique financial services tenants Banco Bradesco and BDT Capital Partners as well as Toronto-based Oxford Properties, which sold the property, SL Green has said.
The building’s corner retail location also will soon be home to luxury automaker Aston Martin’s first Manhattan showroom, SL Green said in April.
SL Green also has said it plans to design new amenities, including tailored programs and services for tenants, as part of its capital spending plan for the tower.
What was going on in this deal ... if that building's NOI is around $7-8M, and they levered 60%
Anyone have any insight on this deal? ☠️
What is the question? I have the deal's term sheet and underwrote it.
It is a heavily structured bridge deal,~60k vacant SF, low to medium term WALT for a trophy building on Billionaire's row. Margin is low 200bps.
When is SL green going to sell the building and move into the ground lease position?
maybe when the lease it up? That part was not in their official business plan.
How negative are their CF until it gets leased?
They have always blew me away at some of the moves they make, and they typically are the right thing to do. In 2006 they were selling all their buildings in NYC and entering ground lease positions 10-15 years later they had all their money from the sale and their buildings back.
i'll dm you
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