Andrew Chung, DivcoWest near deal for Brooklyn’s tallest office tower

SL Green was seeking about $160M for 16 Court Street in DoBro: sources

From left: Andrew Chung, 16 Court Street in Downtown Brooklyn (right) and Marc Holliday
From left: Andrew Chung, 16 Court Street in Downtown Brooklyn (right) and Marc Holliday

Andrew Chung’s Innovo Property Group and San Francisco-based DivcoWest are in advanced talks to acquire Brooklyn’s tallest office tower, 16 Court Street, in an off-market deal, The Real Deal has learned.

SL Green Realty’s 36-story Downtown Brooklyn skyscraper, long known as the Montague-Court Building, spans about 315,000 square feet. The real estate investment trust has been quietly shopping the Class A building without outside brokers in recent months, sources said.

Although Innovo and DivcoWest have yet to enter contract, sources said they are the front-runners. SL Green was seeking around $500 per square foot, or about $160 million, for the building, sources added.

Representatives for DivcoWest and SL Green declined to comment, while Innovo could not be reached.

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The tower was SL Green’s first Brooklyn purchase. It partnered with the City Investment Fund to buy the tower for a whopping $107.5 million in 2007 at the height of the market. In 2013, after SL Green bought out the City Investment Fund’s stake in the tower for $62.5 million, the building was valued at $96.2 million, according to a quarterly report from the REIT at the time. The owner has invested at least $20 million in renovations to date.

Located in the Borough Hall Skyscraper Historic District, the tower’s alternate address is 206-212 Montague Street.Tenants include the New York City Department of Health and Mental Hygiene, New York City College of Technology, Marcus & Millichap, and Walgreens on the ground floor. It is 93.5 percent occupied, according to CoStar data. Asking rents for a 12th-floor space in February were $55 per square foot.

Chung, a former partner at the Carlyle Group, founded retail-focused Midtown-based investment firm Innovo Property Group last year. In the past year, it bought a 650,000-square-foot Long Island City warehouse with Westbrook Partners for $195 million and a Chinatown retail condo on Canal Street for $44 million.

DivcoWest, a real estate investment firm founded in 1993, announced in an SEC filing in May that it had raised more than $1 billion in equity funding for a new value-add investment fund. In July, the firm sold a seven-building office complex in Boston for $725 million.