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Carlton Arranges JV Buy of 485 Lex Interest

NEW YORK CITY-Israel-based Optibase and Gilmor USA LLC are acquiring a 49.5% stake in S.L. Green's 921,000-square-foot office tower.

By Paul Bubny | Updated on August 10, 2009

NEW YORK CITY-In a deal arranged by Carlton Group chairman Howard Michaels, the long-rumored sale of S.L. Green Realty’s 485 Lexington Ave. has taken shape. A joint venture of Israel-based Optibase and Gilmor USA LLC has entered into an agreement to acquire 49.5% of the beneficial interest in the 921,000-square-foot office tower, which S.L. Green bought in 2004 along with adjoining 750 Third Ave. for $480 million.

According to a release from Optibase, the JV is paying $20.8 million, along with a loan of approximately $20 million secured by a pledge of an additional 49.5% interest in Green 485 JV LLC. S.L. Green will retain an unencumbered 1% interest in the JV.

The transaction is based on a valuation of approximately $504.2 million, or $547 per square foot, and a cap rate of 6.25%. It’s subject to approval by Wachovia Bank, which holds a $450-million non-recourse loan on 485 Lexington. The JV will assume the debt as part of the agreement.

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