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NEW YORK CITY-SL Green Realty Corp. has completed a 10-year lease agreement at 1372 Broadway with Wal-Mart Stores East LP. The retailer will occupy the entire second floor and second floor mezzanine, comprising a total of 46,103 sf, for executive offices. SL Green also closed on a joint-venture partnership with Wachovia Corp., where Wachovia will own an 85% interest in the property based upon a gross aggregate price of $335 million, or $660 per sf.
The property was formerly wholly owned by SL Green. Located in Times Square South, on Broadway between 37th and s8th Streets, 1372 Broadway is a 21-story property, containing 534,000 of rentable sf. The building was fully renovated by SL Green in 1999 and features a new lobby with entrances on Broadway and 38th Street and new elevator cabs.
Steven Durels, EVP and director of leasing and real property for SL Green, says, "We're delighted Wal-Mart chose to locate its Manhattan offices at 1372 Broadway, which has become the location of choice for executive offices for leading apparel firms. In its new office site Wal-Mart will join long-term, prestigious tenants Ann Taylor Inc. Ross Stores Inc. and international wholesaler, Millwork Trading Co."
Treeline Real Estate Group together with Cushman & Wakefield Inc represented the tenant in the new agreement. SL Green represented the landlord.
SL Green's sale of its interests in 1372 Broadway will generate gains of approximately $215 million. Consistent with SL Green's 2007 disposition plan, the proceeds generated by this sale will be reinvested in a tax-efficient manner as part of a 1031-exchange with properties acquired through the company's merger with Reckson Associates.
Andrew Mathias, president and CIO of SL Green, says, "Upon the acquisition of the Reckson portfolio in January 2007, our plan was to immediately sell up to $1 billion or more of assets. This disposition allows us to continue to participate in the upside of an asset that we have successfully repositioned for maximum value creation through our retained interest and incentive fees. Wachovia has been a tremendous counterpart for us on the financing side of our business and we are very pleased to complete our first joint venture transaction with them."
Additionally, two other noteworthy leasing transactions with clothing retailers were recently signed at the property: an extension and expansion of Ross Stores Inc. representing 32% of the property; and, a renewal, extension and expansion of Ann Taylor, representing 18% of the property.
Wachovia Securities acted as financial advisor to Wachovia Corp. Eastdil Secured acted as an advisor to SL Green in this transaction.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
