SL Green, Stonehenge, Sutton to close $416M East Side purchase today

By Adam Pincus | January 31, 2012 11:30AM

SL Green Realty, partnering with Stonehenge Partners and retail investor Jeff Sutton, is expected to close today on eight East Side properties for $416 million, executives at SL Green Realty said today during its fourth-quarter conference call.

The David Frankel Realty portfolio includes high-end retailer Prada’s location at 724 Fifth Avenue, as well as 752 Madison Avenue, 19 East 65th Street, 21 East 65th Street, 762 Madison Avenue, 44 West 55th Street, 400 East 57th Street and 400 East 58th Street.

The acquisition, which includes 402 apartment units, was SL Green’s first foray into residential properties. Stonehenge, led by Ofer Yardeni and Joel Seiden, owns 2,560 apartment units in Manhattan, not including the new acquisition.

Speaking about investing in residential assets, SL Green CEO Mark Holliday said on the earnings call, “I think it is a nice complement to our business.”

SL Green reported yesterday that its full-year funds from operations was $4.88 per diluted share, down from $5.04 per diluted share in 2010. The same-store net operating income rose by 2.9 percent in 2011 to $696.8 million, the company reported.

This is the first acquisition Stonehenge has done with SL Green. Sutton and SL Green have partnered frequently, on deals such as 1552 Broadway.

Richard Dansereau, a managing director of the investment management division of Stonehenge, told a group of industry professionals at a breakfast meeting, also this morning, that approximately 50 percent of the total revenue from the portfolio was from commercial leasing.

He added that one of the buildings, which he did not identify, was expected to close at the end of February, but another source said they all expect to close today.

In the portfolio purchase, Sutton, president of Wharton Properties, and SL Green will own and operate the retail space, while Stonehenge and SL Green will own and operate the residential space, a source close to the deal said. Sutton and Stonehenge were not immediately available for comment.