SL Green to Buy, Sell in Two Deals Totaling $745M

It’s not every day that a real estate company announces it has signed deals involving two properties valued at an aggregate three-quarters of a billion dollars.
180 Maiden Lane

180 Maiden Lane

By Barbra Murray, Contributing Editor

It’s not every day that a real estate company announces it has signed deals involving two properties valued at an aggregate three-quarters of a billion dollars, but SL Green Realty Corp. has done just that. Along with joint venture partner The Moinian Group, the REIT will sell the office building at 180 Maiden Lane for $470 million; in a separate transaction, it will acquire the commercial condo units at 55 W. 46th St. for $275 million.

SL Green had not placed 180 Maiden Lane on the market, but an office operator came along and made an offer the JV couldn’t refuse. The agreement to sell the 40-year-old Class A building comes approximately three years after SL Green and Moinian teamed up to recapitalize the 1.1 million-square-foot office property, located along the water in the Financial District. The REIT ponied up $41 million in cash and operating partnership units valued at $31.7 million for a 49.9 percent stake. At the time, 180 Maiden Lane was fully leased, but it was no secret that a big vacancy was imminent; SL Green walked in with eyes wide open, up for the challenge.

“We are very pleased with the outcome of our investment in 180 Maiden Lane,” Isaac Zion, SL Green co-chief investment officer, noted in a prepared statement. “It represents the most recent example of what we believe is our unsurpassed ability to find intrinsic value in an asset and to generate significant returns for our shareholders, as evidenced by our internal rate of return on the investment of approximately 16 percent.”

Sell a little, buy a little. In an off-market transaction, SL Green will snap up 319,000 square feet of vacant office condo space at 55 W. 46th, as well as a retail store, the building’s parking facility and a fitness center. “Being able to acquire the most valuable office space, only the tower floors, of a newly constructed office building at a price that is significantly below replacement cost is a rare opportunity,” SL Green President Andrew Mathias said.