The Real Deal New York

SL Green sells 40% stake in 11 Madison to Prudential

Investment firm pays $480M for stake, and will also assume portion of debt on the tower

August 11, 2016 09:36AM
By Konrad Putzier

Marc Holliday and 11 Madison Avenue

Marc Holliday and 11 Madison Avenue

UPDATED, 4:43 p.m., August 11: SL Green Realty sold a 40 percent stake in 11 Madison Avenue to Prudential’s real estate subsidiary. PGIM Real Estate (formerly known as Prudential Real Estate Investors) paid $480 million for the stake, and will also assume a portion of the office tower’s debt.

The deal values the tower at $2.6 billion including lease-stipulated improvements – the same price SL Green paid when it bought the tower from the Sapir Organization and the CIM Group last August.  In a statement SL Green said it would use the money “for debt reduction and other investment opportunities.”

As part of the deal, PGIM Real Estate (formerly known as Prudential Real Estate Investors) also secured an option to buy a further 9 percent stake in the 2.3 million-square-foot Art Deco building over the coming year. CBRE’s TRData LogoTINY Darcy Stacom and William Shanahan brokered the sale.

Major tenants in the building are Credit Suisse, Sony and Yelp.

SL Green simultaneously announced it will buy back $1 billion of its own shares.

The announcements come a day after SL Green said it settled a lawsuit over its $3.14 billion Midtown office development One Vanderbilt. SL Green recently signed a term sheet for a $1.5 billion construction loan for One Vanderbilt.

The office landlord, New York City’s largest, closed on the sale of Citigroup’s Tribeca headquarters at 388-390 Greenwich Street in June for $1.8 billion.

Clarification: This story was updated to clarify that to purchase the stake, PGMI will pay $480 million and also assume some of the debt on the property. 

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