SL Green just put another office tower on the block. Here’s why

REIT will use proceeds to fund stock buyback program

TRD New York /
Jan.January 24, 2019 04:10 PM

Marc Holliday and 521 Fifth Avenue (Credit: SL Green and Google Maps)

The former Lefcourt Building on Fifth Avenue just north of Bryant Park is the latest property that SL Green Realty is looking to sell in order to finance its stock buyback program.

The real estate investment trust its partners are soon going to put the 500,000-square-foot building at 521 Fifth Avenue on the market, company executives said on their earnings call Thursday afternoon.

“Befitting of the program of trying to recycle assets like that into stock that we think is trading at a heavily discounted basis, we think that that has reached a point in time that we’re going to put that in the market,” SL Green CEO Marc Holliday said.

Holliday didn’t say anything about pricing, but sources familiar with the building valued it at $450 million earlier last year.

That’s when SL Green’s partners on the property – a joint venture between LaSalle Investment Management and Quantum Global Real Estate – put their 49.5 percent minority stake on market.

SL Green bought the 38-story pre-war building in 2011 for $225 million, and sold the minority stake to the LaSalle and Quantum Global JV (known as Plaza Global Real Estate Partners) for $72 million.

The retail is leased to Urban Outfitters and Equinox. Office tenants include Chinatrust Commercial Bank, Berkadia Commercial Mortgage and KGS Capital Markets.

“It’s a great building, great asset,” Holliday said. “We’ve owned it for a long period of time. It’s well leased.”

With its stock trading at a heavy discount to the value of its properties, SL Green in recent years has been selling assets to fund its aggressive stock buyback program.

The REIT in November green-lighted another $500 million for the program, bringing the total authorization to $2.5 billion. SL Green is also considering selling the News Building at 220 East 42nd Street, which could hit the market with an asking price as high as $1 billion.


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)

Here’s what the $10M-$30M NYC investment sales market looked like last week

Here’s what the $10M-$30M NYC investment sales market looked like last week
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
Andrew Florance, CEO of CoStar (Photo by Jeffrey MacMillan for the Washington Post)

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts
An institutional investor’s sale of a 7 percent stake in an exchange-traded real estate fund reveals deep concerns about the sector. (Credit: iStock)

Mystery investor dumps big stake in real estate fund

Mystery investor dumps big stake in real estate fund
Joseph Chetrit and 118 East 76th Street (Credit: Sylvain Gaboury/Patrick McMullan via Getty Images, Google Maps)

Joseph Chetrit’s townhouse sale led mid-market NYC deals last week

Joseph Chetrit’s townhouse sale led mid-market NYC deals last week
Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off
CEO Andrew Florance (Credit: CoStar via YouTube)

CoStar buying Ten-X for $190M

CoStar buying Ten-X for $190M
arrow_forward_ios

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

Loading...