SL Green Forms $1.6B Acquisition Contract

NEW YORK CITY-SL Green has entered into an agreement to acquire two Downtown trophy office buildings for $1.6 billion, or $598 per sf. The adjacent buildings total more than 2.6 million sf. SL Green has also entered into an agreement with SITQ to form a joint venture simultaneously with the closing of the acquisitions, with SL Green having a 52.5% interest and SITQ having a 47.5% interest.

The buildings will be occupied by a financial services tenant under the terms of a 13-year triple-net lease that provides for annual rental increases. The initial rental payments will provide a 6.3% un-leveraged return on the purchase price. Due to confidentiality provisions in the purchase agreement, SL Green was unable to provide further details of the acquisition at this time.

The transaction, which is subject to customary closing conditions, is expected to close this month. Mortgage financing will be provided by Westdeutsche ImmobilienBank AG and PB Capital Corp. Cushman & Wakefield Sonnenblick-Goldman LLC exclusively arranged the financing.