SL Green Lands Partner, Financing for Manhattan Project
- Sep 16, 2020
SL Green Realty Corp. is moving forward with the development of a 27-story, 215,000-square-foot mixed-use building for Pace University at 126 Nassau St. in Manhattan’s Financial District now that it has capitalized the project and closed on a $125 million construction loan with The Bank of China.
Meritz Alternative Investment Management has taken an 80 percent interest in the new joint venture, with SL Green retaining a 20 percent interest and oversight of the development at the corner of Nassau and Beekman streets. The price Meritz, a South Korean-based financial services conglomerate, paid for the majority stake in the joint venture was not released. Details about the construction loan were also not disclosed.
SL Green acquired the 99-year ground lease of 126-132 Nassau St. in March and secured a 30-year leasehold condominium from Pace University for the new development. The project is part of Pace University’s NYC Master Plan to revitalize its Lower Manhattan campus. The new building will include suite-style housing, dining, a library, classrooms, as well as other academic and common spaces. Construction is expected to begin in early 2021 and be completed by fall of 2023.
The university is marketing development rights at One Pace Plaza East, an 18-story, 462,500-square-foot tower near the Brooklyn Bridge, as a potential life sciences property. Built in the late 1960s, One Pace Plaza East has dorms, classrooms, offices, a library and the Schimmel Center Theater, but Pace University officials say it would be too expensive to renovate. One Pace Plaza East will be demolished in early 2024 after the Nassau Street building is completed. The sale will not affect One Pace Plaza West, which was recently renovated. The university is also renovating parts of 41 Park Row and notes on its website it plans to take over the remainder of 161-163 William St. in late 2022.
SL Green has built dormitory projects for Pace University in the past, including 33 Beekman St., developed jointly with Naftali Group and sold in 2015, and 180 Broadway, which was developed with partner Jeff Sutton and sold in 2013.
One Vanderbilt debuts
Harrison Sitomer, SL Green senior vice president, said in a prepared statement securing the joint venture partner and construction financing for the project is a vote of confidence in the REIT’s ability to deliver best-in-class new development to prominent New York City users. He said it’s the next step in the execution of SL Greens’ development strategy. SL Green, Manhattan’s largest office landlord, and development partner Hines opened One Vanderbilt on Monday, the second-tallest skyscraper in New York City. The 1,401-foot-tall building with 77 stories spans a full city block between 42nd and 43rd streets, between Madison and Vanderbilt avenues in Midtown Manhattan. The property has 1.7 million square feet of Class A office space and is nearly 70 percent leased.