SL Green Closes 1250 Broadway Sale

NEW YORK CITY-Locally based SL Green Realty Corp. closes its sale of 1250 Broadway to Murray Hill Properties for $310 million, or approximately $463 per sf, at a capitalization rate of 4.5%. The 39-story property went on sale early January as GlobeSt.com reported. Since then, GlobeSt.com exclusively learned that Murray Hill purchased the class A property only days before the first bid was due.

At the time, Norman Sturner, MHP co-founder and principal, told GlobeSt.com that “we pre-empted the whole world. It is what we consider a coup.” Sturner went on to explain that “the teaser had been sent out” on 1250 Broadway, and first bids were to be submitted on Feb. 12. “But there were no bids. We bought it this morning [Friday, Feb. 8].”

Holliday

SL Green declined to discuss its disposition strategy regarding this deal when contacted by GlobeSt.com; however, company officials did note that they are pleased with the outcome. Located near Penn Station on Broadway at 31st Street, 1250 Broadway is a 670,000-sf office tower which sale caps a successful nine-year period of ownership and management by SL Green, during which time the property’s value more than tripled, according to an SL Green statement. The company acquired the building in 1999 for $93 million, and then sold a 45% interest to SITQ in 2001 in a transaction that valued the property at $126.5 million. After executing more than 630,000 sf of leases and completing a $6.8-million building renovation program, the partners recapitalized the property in October 2006, with an agreed-upon value of $260 million–at which time SL Green’s economic stake increased from 54.9% to 66.2%.

SL Green expects to recognize an incentive fee of at least $15 million upon consummation of the sale, the statement notes. Marc Holliday, CEO of SL Green says in a prepared statement that “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 a property and bringing it to full realization. In addition, our working partnership with SITQ has never been stronger. Together we have created substantial value–not only at 1250 Broadway, but also at One Park Ave. and 1515 Broadway. We believe that our most recent joint investment, the $1.6-billion acquisition of 388 and 390 Greenwich St., will prove successful as well.”