In early March, locally based SL Green entered into a hard contract for its sale of the property for approximately $463 per sf, at a capitalization rate of 4.5%. SL Green declined to discuss its disposition strategy regarding this deal when contacted by GlobeSt.com at the time and still "declines further comment" at this time, according to a company spokesperson; however, company officials previously said that the firm was pleased with the outcome.
Carlton Advisory Services also recently closed the $215 million of acquisition and mezzanine financing for the acquisition of the tower. The firm secured a $175 million first mortgage with a "major German lender" at an "extremely competitive spread" not easily obtained in today's market, the firm explains in a prepared statement. In addition, a "prominent REIT" provided $40 million of mezzanine financing to complete this financing. The transaction was closed on behalf of Norman Sturner of Murray Hill Properties and a large German opportunistic equity fund. Carlton chairman Howard Michaels tells GlobeSt.com that the "prominent REIT" is SL Green and the lender is German Bank LBBW.
The building's 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 a previous 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 Oct. 2006, with an agreed-upon value of $260 million--at which time SL Green's economic stake increased from 54.9% to 66.2%.
Marc Holliday, CEO of SL Green, previously said in a prepared statement that "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."
Cushman & Wakefield acted on behalf of the seller. Richard Baxter, who handled the marketing of the sale, along with Ron Cohen, Scott Latham and Jon Caplan of C&W, previously told GlobeSt.com that the property was 99% occupied; however, 30% of the building is rolling over within the next five years, he added. Market rents are about $60 per sf in the area; however, the asking rents in the building are in the mid-$30s, he said.
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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.
