SL Green sells Tower 45, stake in 131 Spring Street

Deals free up cash for $2.6B buy of 11 Madison

New York /
Jul.July 13, 2015 11:16 AM

SL Green sold stakes in two Manhattan office properties for a combined $587 million in an attempt to free up cash for its blockbuster purchase of 11 Madison Avenue.

The REIT announced this morning that it sold Tower 45, a 460,000-square-foot office building at 120 West 45th Street, to an unnamed buyer for $365 million. JLL’s Richard Baxter and CBRE’s Darcy Stacom brokered the deal.

SL Green also sold an 80 percent stake in the mixed-use building 131-137 Spring Street in Soho to Invesco. According to the release, the sale values the property at $277.8 million, which would put the sales price at $222.2 million. The two firms will run the property as a joint venture.

“After repositioning both of these assets to unlock additional value, we will realize in excess of $400 million of net cash proceeds from these transactions, which were executed at a blended cap rate of 3.3 percent,” said SL Green’s President Andrew Mathias in a statement.

The announcement arrived the same day that Goldman Sachs downgraded SL Green’s stock from “neutral” to “sell,” citing high leverage that could make it hard to fund new deals.

But by the looks of it, SL Green won’t use the money from the two sales to stock up its cash reserves. Instead, it will use it to help finance its purchase of 11 Madison Avenue for $2.6 billion. After going in contract to buy the art deco office building in May, the REIT has been looking to sell properties to get the cash needed to close on the deal.

In an SEC filing from early June, SL Green announced it is looking to rake in between $1.1 billion and $1.2 billion through asset sales and recapitalizations. The SEC filing showed Tower 45 and 131-137 Spring Street as possible assets for sale, along with 609 Fifth AvenueAnd 885 Third Avenue.

“Our intention is to fund the Company’s pending acquisition of the iconic 11 Madison property through a strategic combination of property sales, joint ventures, new financing and existing property debt refinancings, while retaining substantial cash for other investments in the pipeline,” Mathias said in the statement. “These transactions announced today are consistent with that plan.”


Related Articles

arrow_forward_ios
The Daily News Building at 220 East 42nd Street and SL Green CEO Marc Holliday (Credit: Getty Images)

SL Green puts Daily News building up for sale

SL Green puts Daily News building up for sale
SL Green snags private-equity firm at One Vanderbilt

SL Green snags private-equity firm at One Vanderbilt

SL Green snags private-equity firm at One Vanderbilt
SL Green’s locks in big bank lease at Hudson Yards redevelopment site

SL Green’s locks in big bank lease at
Hudson Yards redevelopment site

SL Green’s locks in big bank lease at
Hudson Yards redevelopment site
One Madison Avenue and Marc Holliday (Photos via SL Green)

SL Green snags $1.25B construction loan for One Madison Avenue

SL Green snags $1.25B construction loan for One Madison Avenue
410 Tenth Avenue (Google Maps, iStock)

Real estate stocks had a big week. But are they still undervalued?

Real estate stocks had a big week. But are they still undervalued?
Clockwise from top left: Boston Properties' Owen Thomas; Empire Real Estate Trust's Tony Malkin; Equity Commonwealth's David Helfand; Columbia Property Trust's Nelson Mills; SL Green's Marc Holliday; Vornado Realty Trust's Steve Roth; and Brookfield's Brian Kingston (Getty)

Office unease: Tenants are paying up but staying away

Office unease: Tenants are paying up but staying away
(Getty, iStock)

Office, apartment REITs get shot in the arm from vaccine news

Office, apartment REITs get shot in the arm from vaccine news
A photo illustration of SL Green's Marc Holliday (Getty; iStock; SL Green)

NYC offices get creative to lure workers back

NYC offices get creative to lure workers back
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...