The Real Deal New York

SL Green spends $300M on three Downtown properties

REIT still gobbling up buildings despite concerns over debt levels

July 21, 2015 11:30AM
By Rich Bockmann

From left: 110 Greene Street, 187 Broadway and Marc Holliday

From left: 110 Greene Street, 187 Broadway and Marc Holliday

Despite being downgraded by Goldman Sachs last week and news it would sell off $1.1 billion to cover the cost of 11 Madison, SL Green Realty is still hungry for more buys.

The city’s largest office landlord announced today that it has acquired a trio of downtown properties for just shy of $300 million.

In Soho, the Marc Holliday-run REIT bought a 90 percent interest in the 160,000-square-foot 110 Greene Street from Goldman Properties, a transaction that values the asset at $255 million.

Goldman is the largest tenant in the building, also known as the Soho Building, with just shy of 12,000 square feet, according to Costar.

“This transaction presents SL Green with a unique opportunity to acquire and further enhance the property into one of the most compelling multi-use assets in Downtown New York, SL Green managing director Brett Herschenfeld said in a statement.

Goldman received approval from the city’s planning department last year to utilize a portion of the building’s ground floor for retail.

SL Green also announced the purchase of two buildings near the Fulton Transit Center for $63.7 million: the 7,500-square-foot 187 Broadway (tenant Payless Shoes) and 5-7 Dey Street, a 70,000-square-foot, Class B office building.

The seller was the Sakele Brothers Company. Both transactions were completed directly between the parties and are expected to close in the third quarter.

Goldman Sachs last week downgraded the REIT to “sell” due to its debt-heavy strategy.

However, in a statement, Herschenfeld said the REIT’s use of proprietary currency to purchase 187 Broadway and 5-7 Dey Street will allow it to keep the debt components down.

The company revealed in early June that it planned to sell off at least $1.1 billion to finance the acquisition of 11 Madison Avenue, the 2.3-million-square-foot Art Deco office building on Madison Square Park.