One Vanderbilt to cost over $3.1B: SL Green

City’s largest office landlord hopes to seal $1.5B construction loan by end of summer

New York /
Jun.June 07, 2016 12:40 PM

SL Green Realty shed more light on how it intends to finance its massive One Vanderbilt office development in Midtown – pegging the project’s total cost at $3.14 billion and noting that it hopes to close on a $1.5 billion construction loan by the end of the summer.

The city’s largest office landlord will need around $1.64 billion in equity to complete the planned 65-story, 1.7 million-square-foot building, SL Green said Tuesday at NAREIT’s REITWeek 2016 Investor Forum in Midtown.

As previously indicated, SL Green is currently in discussions with potential joint venture partners on One Vanderbilt, which is slated to rise to a height of more than 1,500 feet near Grand Central Terminal.

The company detailed how selling a 50 percent stake in the project would bring cover roughly $820 million of the required equity, and SL Green CEO Marc Holliday was confident the REIT would be able to score a partner and fund a project that will cost it north of $1,800 per square foot.

Holliday acknowledged that a “project of this size does present an element of risk.” Though leasing the building would not be a problem, he said, the scale and expense of the project meant SL Green would prefer to have a partner.

One Vanderbilt’s $3.14 billion price tag would put it in select company. One World Trade Center, which opened in 2014, became the world’s most expensive office tower after costing around $3.8 billion to build, while Tishman Speyer’s planned 2.85 million-square-foot, Bjarke Ingels-designed office tower at 66 Hudson Boulevard — known as the Spiral — is expected to cost north of $3 billion.

SL Green also announced Tuesday that it has signed New York Life Insurance Co. to a nearly 115,000-square-foot lease renewal and expansion at 420 Lexington Avenue, the Midtown office property also known as the Graybar Building.

The 10-year deal with New York Life sees the insurance company take an additional, nearly 27,000 square feet on the 14th floor.

SL Green president Andrew Mathias noted that leasing demand, particularly from financial services tenants, has broadly “continued unabated.” Holliday added that job growth in the financial services sector “has been a modest grower, not subtractor, in 2016.”

Holliday also touched upon SL Green’s underperforming share price, which opened at $100.49 on Tuesday and is trading at a roughly 30 percent discount to the net value of the REIT’s assets – saying that it’s the executive team’s “job to narrow or eliminate that gap with where the stock price currently trades.


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
Bloomberg nabs 191K sf expansion with SL Green
Bloomberg nabs 191K sf expansion with SL Green
Bloomberg nabs 191K sf expansion with SL Green
110 East 42nd Street with SL Green's Marc Holliday and Meadow Partners' Jeffrey Kaplan (SL Green, NYU Photo Bureau, Meadow Partners)
SL Green unloads Midtown building for $117M
SL Green unloads Midtown building for $117M
HNA Group's Guoqing Chen, 245 Park Avenue in Manhattan and 181 West Madison Street in Chicago (Committee of 100, Wikimedia)
HNA entity puts Park Avenue office tower, Chicago Loop high-rise in bankruptcy
HNA entity puts Park Avenue office tower, Chicago Loop high-rise in bankruptcy
590 Fifth Avenue and SL Green CEO Marc Holliday (SL Green)
SL Green sells 590 Fifth Avenue for $103M
SL Green sells 590 Fifth Avenue for $103M
SL Green CEO Marc Holliday, Chelsea Piers Fitness CEO David Tewksbury and One Madison Avenue (Getty, SL Green)
Chelsea Piers is coming to SL Green’s One Madison
Chelsea Piers is coming to SL Green’s One Madison
arrow_forward_ios

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

Loading...