SL Green Buys Ivanhoe Cambridge’s Stake in NYC Citigroup HQ

SL Green Realty Corp. will acquire Ivanhoé Cambridge’s stake in 388-390 Greenwich St. in Manhattan’s TriBeCa, thus assuming full ownership of Citigroup Inc.’s 2.6 million-square-foot headquarters in New York.

SL GreennSL Green Realty Corp., of New York, will acquire Ivanhoé Cambridge’s stake in 388-390 Greenwich St. in Manhattan’s TriBeCa, thus assuming full ownership of Citigroup Inc.’s 2.6 million-square-foot headquarters there, the REIT announced Monday.

The transaction values the consolidated investment interest at $1.585 billion. Fourth-quarter information supplied to Commercial Property Executive by an SL Green spokesperson indicates that the company’s previous stake was 50.6 percent, making the acquisition worth about $783 million.

The closing is expected in the second quarter. Callahan Capital Properties served as an advisor to Ivanhoé Cambridge.

The two buildings, a 39-story office tower and an eight-story building with large trading floors, are fully triple-net leased to an affiliate of Citigroup Inc. through 2035, under an extension that was announced in December 2013.

The agreement with Citi includes an option for the company to acquire the properties during a window starting Dec. 1, 2017, and ending Dec. 31, 2020.

SL Green and an affiliate of Ivanhoé Cambridge had acquired the property from Citi in late 2007 in a $1.58 billion, 15-year sale-leaseback.

“We have enjoyed a successful partnership with Ivanhoé Cambridge at 388-390 Greenwich, capped by Citi’s recent lease extension, which was one of the largest lease transactions ever executed in New York,” SL Green president Andrew Mathias said in a release.

Also Monday, SL Green announced that it had reached an agreement to sell its 43.74 percent interest in a 28-building Southern California office portfolio for $100 million. The buyer is an affiliate of SL Green’s joint venture partner, Blackstone Real Estate Partners VII, which now will take full ownership.

The portfolio, which totals 3.7 million square feet, is in various markets, including Los Angeles, Orange County and San Diego, and was originally part of a somewhat larger portfolio that SL Green acquired through foreclosure. SL Green restructured the approximately $750 million of in-place financing and recapitalized the portfolio through the JV with Blackstone.

The portfolio’s average occupancy as of the fourth quarter was 77.9 percent.

SL Green reaped “a significant gain” from the sale and will “redeploy the proceeds back into New York City assets,” David Schonbraun, SL Green’s co-chief investment officer, said in a release.