SL Green puts more properties up for sale to raise cash

SL Green Realty has lined up more assets to unload as the company looks to raise some cash.

The Marc Holliday-led real estate investment trust is looking to sell two large apartment buildings in Sutton Place and an office condominium in Midtown, sources told The Real Deal.

The two multifamily rental buildings, which combined hold nearly 400 units, have a large number of rent-stabilized units. After the state passed a new rent law last year, it limited the ability of landlords like SL Green to raise rents. That, coupled with the company’s need to raise liquidity as tenants struggle to pay rent due to the coronavirus shutdown, contributed to SL Green putting the properties up for sale.

“They have some real cash needs and they want an immediate upside,” one source familiar with the company’s strategy explained. “They just don’t see that being in the multifamily market.”

A representative for SL Green declined to comment.

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The REIT hired Ackman-Ziff Real Estate Group to market the smaller of the two buildings: the 16-story 400 East 58th Street, which has 123 units.

SL Green is also in discussions to sell the other building, the 261-unit 400 East 57th Street, to co-owner Ofer Yardeni of Stonehenge Properties. The REIT owns a 41 percent stake in the building and Stonehenge owns 10 percent. BlackRock owns a 49 percent stake, which it acquired in 2016 in a deal valuing the property at $170 million.

Cushman & Wakefield is marketing the property.

The two buildings are part of a seven-building portfolio SL Green and Stonehenge bought in 2011. The REIT three years later expanded its reach into the multifamily market when it acquired a 50-percent stake in Stonehenge’s 23-building, 2.6 million-square-foot portfolio spanning more than 2,800 rental units.

Elsewhere, SL Green hired Avison Young to sell an office condominium at the International Gem Tower in the Diamond District at 50 West 47th Street. SL Green bought the upper floors of the tower from Extell Development in 2014 for $275 million.

The company is New York City’s largest office landlord, and also has exposure to the city’s high-street retail and multifamily markets.

In an earnings release put out earlier this week, the company said that due to the Covid-19 pandemic it could face a slowdown in leasing, reduced rent collections, development delays and increased safety costs.

SL Green is reportedly in talks to sell a package of loans to CIM Group, Rockwood Capital and Kushner Companies at a loss.

Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229.