SL Green Closes $925M in Financing for Iconic NYC Building

SL Green Realty has arranged $925 million worth of bridge acquisition financing for New York City’s iconic Sony Building at 550 Madison Ave., which was purchased by New York-based developer The Chetrit Group for $1 billion from Sony Corp.

SL Green Realty Corp. has arranged $925 million worth of bridge acquisition financing for New York City’s iconic Sony Building at 550 Madison Ave., which was purchased by New York-based developer The Chetrit Group L.L.C. for $1.1 billion from Sony Corporation of America.

The building is currently home to Sony’s U.S. headquarters and the company will remain in the location for at least the next three years.

The financing matures contemporaneously with the expiration of Sony’s leaseback of the property, and consists of a $600 million senior loan originated by Bank of China, a $175 million senior mezzanine debt, which SL Green sold to a private investment manager and a $150 million junior mezzanine debt originated by SL Green.

“This deal illustrates SL Green’s ability to structure, syndicate and execute financing for complex capital transactions,” David Schonbraun, SL Green’s co-chief investment officer, said in a company statement. “While we are best known as New York City’s largest office landlord, we also have emerged as a major player in the structured finance arena. In that regard, SL Green is now the primary provider of subordinate capital for real estate transactions in the greater New York market.”

Following completion of the financing, SL Green sold one half of its interest in the junior mezzanine debt.

The 852,830-square-foot, 37-floor tower features a Chippendale-style roof pediment designed by Philip Johnson and John Burgee and stands as one of the Manhattan skyline’s most distinctive towers.  It was originally constructed for AT&T, and Sony purchased the building in 2002 for $236 million.  

As of December 31, 2012, SL Green owned interests in 85 Manhattan properties totaling 40.8 million square feet, including ownership interests in 27.8 million square feet of commercial properties and debt and preferred equity investments secured by 13.0 million square feet of properties.

Ironhound Management was the exclusive advisor to the borrower.