SL Green Closes $900M Refinancing of Manhattan’s 1515 Broadway
- Feb 20, 2013
SL Green Realty Corp. has done it again. New York City’s largest office landlord has refinanced its 1.8 million-square-foot office building at 1515 Broadway to the tune of $900 million. The 12-year first mortgage refinancing comes less than a year after SL Green completed a $775 million, seven-year refinancing deal for the fully leased high-rise.
The new loan, featuring a fixed rate of 3.93 percent, not only allows SL Green to replace the previous loan, but it gives the REIT a little extra pocket change–$116 million in net proceeds, to be exact. The 54-story tower in Times Square has been part of the SL Green portfolio since 2002, when the company joined forces with Canada’s SITQ Immobilier to purchase the asset for $480 million. The partners later submitted the property to a $40 million repositioning program.
It’s been a busy few years at 1515 Broadway. In 2011, SL Green became sole owner of the asset when it acquired SITQ’s ownership stake in a transaction that valued the consolidated interests at $1.2 billion. In spring 2012, lead tenant Viacom Inc. decided to stay put and increase its elbowroom in a 1.6 million-square-foot lease agreement with a 20-year term.
It has the quality, the location, the tenancy–there is every reason for lenders to be attracted to 1515 Broadway. The sponsorship is nothing to sneeze at either. “The very smart management team takes advantage of the REIT corporate structure to run an opportunity fund in Manhattan,” John W. Guinee III, managing director with investment banking firm Stifel Nicolaus, told Commercial Property Executive. “The reasons we like SL Green are their leasing price point is attractive at $45 to $65, which is acceptable to the growing tenants in Manhattan such as technology, entertainment, new media and publishing tenants. Plus, when you buy stock you’re buying the Manhattan-only office portfolio valued at just over $600 per square-foot, which is a very attractive valuation relative to our estimates of replacement cost.”
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