It looks like 2010 is going to turn out to be another year when Canadian pension fund [more]

EEmerge, an office business center subsidiary of SL Green Realty, has just moved into the 11th and 12th floors of SL Green-owned 1515 Broadway, the famous Times Square home of Viacom and site of MTV studios. The 54-story, 1.9 million-square-foot building, which counts Viacom as its main tenant, will now serve as eEmerge’s main headquarters. The affiliate group, which focuses on flexible and short-term office space, will be utilizing a total of 65,000 square feet in the 72 percent occupied building. TRD
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From left: SL Green CEO Marc Holliday, 1515 Broadway, the Graybar Building

It has been “a very busy, satisfying seven weeks,” for SL Green Realty, CEO Marc Holliday said in a conference call with investors today to discuss the company’s fourth-quarter earnings results. The company last spoke to investors at its annual conference Dec. 7.

SL Green posted a $5 million loss for the quarter yesterday, down from
a $76 million gain for the fourth quarter of 2008, but Holliday was
nonetheless optimistic about 2010′s prospects.
Strong leasing activity will better-position the city’s office landlords to attract tenants without the generous concessions seen in 2009, he said.
“The general consensus amongst owners is that we’re going to
see concessions tighten up this year,” Holliday said, adding that
security deposits and lease lengths were likely to increase.
The city’s largest landlord saw average starting rents fall by
30 percent to $33.05 per square foot in the fourth quarter, pushed
downward in part by a 227,782-square-foot lease renewal by BMW of
Manhattan at 555 West 57th Street. Starting rents averaged $47.31 per
square foot in the third quarter of 2009. [more]

While many of the money center banks are sitting on the sidelines when it comes to providing mortgage financing, Chinese, German and European financial institutions and insurance companies are dipping their feet into the water to provide much needed financing for commercial real estate. Foreign and domestic lenders and insurance companies prefer to lend to real estate investment trusts. Later this month, a syndicate led by Westdeutsche ImmobilienBank is expected to close on a $135 million loan on the 25-story office tower at 300 Park Avenue. The 15 floors of the tower serve as the world headquarters for Colgate Palmolive. The borrowing entity is controlled by Tishman Speyer Properties. As reported in The Real Deal today, a syndicate of banks led by the Bank of China, provided SL Green Realty with a five-year, floating rate mortgage for $475 million for the landmark Times Square office tower at 1515 Broadway. The new mortgage replaces the former $625 million mortgage that was due to mature in November 2010.  More
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SL Green Realty has closed on a $475 million refinancing of 1515 Broadway, home to Viacom International, the company announced today. The building, between 44th and 45th streets, is owned by SL Green in a joint venture with SITQ, a real estate investment, management and development subsidiary of the Caisse de dépôt et placement du Québec, or the Quebec Deposit and Investment Fund. A syndicate led by the Bank of China provided the new five-year, floating rate mortgage. SL Green and SITQ replaced the former $625 million mortgage that was due to mature in November this year with longer-term financing. “We
were able to source this financing which required a lower equity
contribution than previously forecast,” said SL Green President Andrew
Mathias. TRD

Office building owners, who were insulated from the downturn at first because of long-term leases, are now slashing rents and piling on incentives to retain tenants whose contracts are up. At Boston Properties’ GM Building in Manhattan, new tenants are paying 17 percent less in gross rents than former tenants did for office space there. SL Green Realty, which owns dozens of Manhattan properties including 100 Park Avenue and 1515 Broadway, offered 6.9 months of free rent and doubled its construction allowance for new lease signers during the third quarter. Sweet tenant deals come with a hefty price tag for owners, though. SL Green’s funds from operations dropped 28 percent in the third quarter year-over-year. According to SL Green CEO Marc Holliday, the large inventory of cheaper sublease space available has been a major contributing factor to declining rents and the need for incentives. Once that inventory is absorbed, he expects the office leasing market to improve. [WSJ]

MTV leaves 1515 Broadway (Photo source: PropertyShark.com)

One of Times Square’s most recognizable tenants, MTV, may soon be vacating the neighborhood. Its parent company, Viacom, has chosen not to renew its lease at 1515 Broadway between 44th and 45th streets. The music entertainment juggernaut moved into its glass-paneled digs back in 1997, when crime was high and rent was low, for around $40 per square foot. The Post estimated that rent in that neighborhood could now be more than 10 times what it was then. The space’s property manager, SL Green, has already begun marketing the spot.

Some large direct leases have recently been signed in Manhattan, a shift in a commercial market that has been slow so far this year, the New York Post reported. Syska Hennessy Group, an engineering firm specializing in technology, construction and specialized consulting, has leased 64,788 square feet on the 14th and 15th floors of 1515 Broadway. The asking rent was $58 per square foot. In the 1.8 million-square-foot tower, only 34,000 square feet is now vacant. Syska Hennessy is moving from 11 West 42nd Street and will have 15,000 square feet more at 1515 Broadway than it had at its previous location. AlixPartners, an advisory firm that focuses on corporate financial performance, has also signed a lease for 63,000 square feet at 40 West 57th Street.

The cable channel Showtime Networks is eyeing a move from its current
home in a Theater District skyscraper to a rehabilitated century-year-old building at 200 Fifth Avenue at Madison Square Park, several
sources said. Showtime, a division of the CBS Corporation, currently leases 172,600
square feet of space at the 2.4 million-square-foot 1633 Broadway at
51st Street; the lease is set to expire in 2010, according to data from
CoStar. Real estate investment company L&L Holding bought 200 Fifth Avenue,
at the corner of 23rd Street, in 2007 for $480 million and is pouring
another $120 million into the 800,000-square-foot building, where
advertising firm Grey Group is taking 370,000 square feet. [more]

From the May issue: As the commercial credit crisis kicks into
high gear in the New York market, SL Green, the city’s largest
commercial landlord, has found itself in the center of a growing storm.
The publicly traded investment trust, which owns 29 office buildings in
Manhattan alone, is facing the sudden reality of holding billions of
dollars in commercial debt in a real estate market that is rapidly
declining. After years of making highly leveraged deals, led by the
mammoth $6 billion acquisition of rival real estate investment trust
Reckson Associates in 2007, the company is now awash in a sea of debt.
What’s worse, it’s on a ship that is leaking revenue in the form of
dropping commercial rents. [more]