SL Green, Stonebridge JV for NYC Retail, Multi-Family Buy
- Oct 03, 2011
October 3, 2011
By Nicholas Ziegler, News Editor
SL Green Realty Corp. continues to find partners for all its New York City deals. After embarking on joint ventures with partners to acquire 1552 Broadway earlier this year and to purchase adjacent 1560 Broadway last month, the investment firm has entered into an agreement with Stonebridge Partners to acquire eight retail and multi-family properties in New York City for $416 million. The deal, expected to close in the first quarter of next year, was advised by FTI Consulting.
The most major building in the portfolio is located at 724 Fifth Avenue, between 56th and 57th Streets in Manhattan’s Plaza District, where Prada currently occupies approximately 20,700 square feet. SL Green already holds two other properties on Fifth Avenue, 717 and 720. 717 Fifth Ave. is home to Giorgio Armani’s flagship store and will hold the future flagship store of Dolce & Gabanna.
The residential portion of the portfolio includes a total of 402 rental units located in prime Midtown and Upper East Side submarkets. Through the venture, the companies plans to significantly upgrade a selection of units and building amenities in an effort to maximize value. Stonehenge will draw on its expertise through its ownership of more than 2,560 apartment units in the city to serve as property manager for the new acquisitions.
“This is an exciting opportunistic investment for SL Green, which already has an outstanding track record in acquiring and repositioning New York City office and retail properties,” Andrew Mathias, president of SL Green, said. “We also are excited about making our first significant equity investment in the multi-family area, which helps to diversify our portfolio further while still maintaining our New York City focus.”
The other properties include interests in 752 Madison Ave., a four-story retail building; interests in 19-21 E. 65th St., which has 9,000 square feet of mixed-use office, multi-family and retail space; 762 Madison Ave., a five-story office and retail building; 44 W. 55th St., a five-story commercial property; 400 E. 57th St., a 260-unit multi-family; and 400 E. 58th St., which has 125 apartment units and 4,000 square feet of ground-floor retail space.
The purchase should bring sizable returns to both SL Green and Stonebridge. A Jones Lang LaSalle report in September ranked Fifth Avenue as the second-most-expensive street in the country. “Consistently ranked among the most expensive shopping streets in the world,” the report noted, “Fifth Avenue is also home to numerous hedge funds looking for top quality space in Midtown and willing to pay more for those coveted office locations with their unparalleled amenities.”