The Real Deal New York

SL Green to sell $1B-plus worth of properties to finance 11 Madison buy

Possible sales include 885 Third Avenue, 131 Spring Street: SEC filing

June 10, 2015 08:00AM
By Konrad Putzier

From left: Marc Holliday and 11 Madison Ave

From left: Marc Holliday and 11 Madison Ave

SL Green Realty intends to sell at least $1.1 billion worth of properties over the coming months to finance its acquisition of 11 Madison Avenue, according to documents filed with the Securities Exchange Commission  Tuesday.

The real estate investment trust went into contract to buy the 2.3 million-square-foot Art Deco office tower in NoMad for $2.6 billion — $2.29 billion plus $300 million in lease-stipulated building improvements — from CIM Group and the Sapir Organization last month. The deal is expected to close in the third quarter, giving SL Green several months to secure financing.

In a form 8-K, which public companies are required to file in case of a major shareholder event, SL Green outlined its financing strategy for the acquisition. The REIT plans to take out a $1.3 to $1.4 billion fixed-rate mortgage with a 10-year term, and rake in a further $300 million by refinancing other properties. Planned asset sales and recapitalizations could add another $1.1 to $1.2 billion, according to the filing, bringing the total volume of funding to $2.8 billion.

The REIT’s filing lists 11 properties that could be sold, with a total value of up to $2.13 billion, including the Manhattan office buildings 120 West 45th Street, 609 Fifth Avenue and 885 Third Avenue, as well as 131-137 Spring Street in Soho, which is reportedly being marketed for $300 million.