Holliday expects recovery after holidays

By Amy Tennery | December 10, 2009 06:59PM

SL Green Realty may have to reevaluate its strategy at 485 Lexington Avenue, CEO Marc Holliday told The Real Deal after the Association of Real Estate Women luncheon today at Tavern on the Green.

The company had been looking to sell off 49.5 percent of its interest in the commercial office building between 46th and 47th streets before the deal fell through, according to an announcement made during an investor meeting Monday.

“We’re in contract of sale, [but] the [special] servicer [CW Capital] looks like they may be rejecting the transfer,” Holliday said after the luncheon. He would only add: “we may be having to evaluate our options.”

As for his other most high-profile dealing this week — purchase of a construction loan at 510 Madison Avenue, a troubled Harry Macklowe tower — Holliday was basically mum. He declined to comment on rumors that Macklowe had been gunning for a debt buy-back, and would not elaborate on the line he had shared with the audience: “We’re just a mortgage lender.”

The conversation followed a largely optimistic speech by Holliday before the AREW crowd, in which he hinted that he expects the office market to begin a recovery in the second half of 2010 and the beginning of 2011. In particular, he said that landlord concession packages will fade beginning in the second half of 2010 and that “there’s a lot of money that’s pent up on the sidelines.”

SL Green had been laying low, he said, a strategy that helped his firm ride out the storm.

“For two years we didn’t do much of anything,” Holliday said. “We bided our time; we went on the defensive. We sold what we thought were the vulnerable non-core assets.”

Leasing activity for SL Green totaled 1.71 million square feet in 2009, Holliday said, adding that overall leasing activity in Midtown is on its way up. As CB Richard Ellis reported yesterday, leasing velocity is on its way up as prices continue to fall.

Holliday was equally optimistic about his Aqueduct racetrack project bid. Although the announcement of the winning bidder has been long-delayed, Holliday told The Real Deal that a decision from state officials could arrive soon.

“New York [has] had a lot of challenges this year,” Holliday said. “I think now with the deficit reduction behind us — that frees up the lawmakers.”

He said he is confident his firm will nab the winning spot, adding that SL Green is “well-positioned to win the bid and move forward quickly.”


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