SL Green Sells 1250 Broadway in Manhattan to Murray Hill Properties for $310M
- Mar 04, 2008
After nine years of ownership, SL Green Realty Corp. has sold 1250 Broadway, a 39-story, 670,000-square-foot Class A office tower, to Murray Hill Properties for $310 million, or approximately $463 per square foot.The capitalization rate on the deal was 4.5 percent. SL Green, which also managed the building at 31st Street near Penn Station, said today the property value on it had more than tripled. The company paid $93 million for the building in 1999. In 2001, it sold a 45 percent stake to SITQ for $126.5 million. In October, 2006, SL Green recapitalized 1250 Broadway to reflect the increase in value to $260 million. The company also increased its economic interest in the building at that time to 66.2 percent because it had exceeded performance thresholds, according to an SL Green release.During its ownership, SL Green had completed a $6.8 million building renovation and had an occupancy rate of 99 percent at time of sale. Major tenants include Archstone-Smith, Reserve Management, the Visiting Nurse Service of New York, Science Applications International Corp. and Woori Bank.The New York City-based REIT expects to receive an incentive fee of at least $15 million when the closing occurs during the second quarter, the company’s release stated. Cushman & Wakefield Inc. represented SL Green in the transaction.“We are very pleased with the outcome of our investment in 1250 Broadway. Our track record there illustrates SL Green’s unsurpassed strengths in recognizing latent value in property and bringing it to full realization,” Marc Holliday, SL Green CEO, said in the release. Holliday also noted that its working relationship with Montreal-based SITQ has never been stronger. The two companies teamed up late last year to buy Citigroup’s properties at 388 and 390 Greenwich St. in lower Manhattan for nearly $1.6 billion, according to a Dec. 19, 2007, CPN report. That deal calls for SL Green to be the majority owner of the 2.6 million-square-foot complex with a 50.6 percent interest. Cititgroup will occupy the buildings under a long-term, triple-net lease.As of Dec. 31, SL Green owned 32 New York City office properties with 24,728,200 square feet. The self-managed REIT is the city’s largest office landlord. It also owns 36 suburban properties in the tri-state area as well as investment interests in retail properties. Other recent big dispositions for SL Green include the sale of 440 Ninth Avenue, an 18-story, 339,000-square-foot office building in Manhattan for $160 million, or about $472 per square foot, to a joint venture of Paramount Group, Inc. and Sherwood Equities, Inc. Also at the end of last year, SL Green agreed to sell 470 Park Avenue South, a 17-story, 260,000-square-foot office building, to an undisclosed institutional buyer for $157 million, or approximately $604 per square foot.Murray Hill Properties, founded in 1973 by Norman Sturner, Neil Siderow and Michael Green, owns dozens of New York City office buildings with several million square feet of space. In June, 2007, Murray Hill Properties bought 1180 Avenue of the Americas, a 23-story, 396,000-square-foot building, for $300 million from Prudential Real Estate Industries. The firm sold the famous Brill Building at 1619 Broadway in Manhattan for $151 million, or $862 per square foot, to Stonehenge Partners, according to a Nov. 14, 2007, report in the New York Observer by Eliot Brown. Brown reported that the company had bought the 11-story building the previous year for $92 million.