SL Green's One Vanderbilt. | Credit Max Touhey
NEW YORK CITY–The SL Green portfolio is in a state of transformation, as the New York-based company sells off static assets to identify opportunities for reinvestment within the portfolio, according to comments Marc Holliday, chairman and CEO, made during the REIT's October earnings call.
A disposition list of non-core and mature assets is in the works for announcement in December. The outlined sales continue to build upon the firm's profits and prices, which trump its stock valuation, according to Holliday.
"We are already at work on lining up additional sales of assets that don't meet our long-term plan, and we will provide more details on these planned dispositions," he said.
Assets for sale range from $500 million and less and are in the right ballpark to capitalize on the current market cycle, which SL Green views as healthy for favorable Midtown assets that can sell for $250 million in equity or less.
Recently, SL Green went under contract to sell the News Building at 220 East 42nd St. for an $815 million price tag. The REIT purchased the property in 2003 for an estimated $265 million and repositioned and re-tenanted the property since then, all upgrades that helped the firm reap big gains over its 18-year hold period. The unlevered IRR was 11% compounded over the hold period.
Since 2016, not counting the News Building sale, the REIT has grossed $9.1 billion in asset value of the sale of its assets, which generated $3.4 billion of net proceeds. "We have no intention stopping there," Holliday said.
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Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
