SL Green continues to unload assets to create cash buffer

REIT wants to sell $110M loan it provided on 111 Wall Street

New York /
Apr.April 30, 2020 08:40 AM
SL Green's Marc Holliday and 111 Wall Street (Credit: SL Green; Google Maps)

SL Green’s Marc Holliday and 111 Wall Street (Credit: SL Green; Google Maps)

SL Green Realty is seeking bids for its largest loan yet as the company looks to raise a large cash buffer against the economic downturn.

The real estate investment trust is offering the $110 million loan it provided Nightingale Properties and Wafra Capital Partners earlier this year to finance their purchase of the 1 million-square-foot office tower at 111 Wall Street in the FInancial District, sources told The Real Deal.

The 6 percent fixed-rate loan has a maturity date of January 2021, according to an offering memorandum reviewed by TRD. It comes with a principal repayment guarantee of $20 million.

A representative for SL Green did not immediately respond to a request for comment. The REIT has tapped Walker & Dunlop to market the loan for sale.

SL Green provided the debt to Nightingale and Wafra, an arm of Kuwait’s sovereign wealth fund, when they purchased the 49-year ground lease on 111 Wall Street in January for $175 million from Zurich Insurance. The Korein family owns the land underneath the 24-story tower, which the new owners plan to pump as much as $150 million into in order to upgrade.

The loan is the latest asset Marc Holliday’s SL Green has put up for sale as the company looks to fill its cash coffers. Late last month the company put a total of eight loans with a combined principal balance of nearly $280 million on the market — loans on office and retail properties in New York City ranging in size from about $20 million to $70 million.

The company is reportedly in talks to sell three of those loans to CIM Group, Rockwood Capital and Kushner Companies at values below par.

SL Green also recently put a pair of multifamily buildings in Manhattan’s Sutton Place neighborhood up for sale with nearly 400 units between them.

Company executives said they’re looking to raise as much as $1 billion to provide protection against the adverse effects the Covid-19 pandemic has wrought on the city’s real estate market.

“It’s a measured number but it’s also an arbitrary number,” Holliday said during the company’s first-quarter earnings call last week. “It’s the number we think if we have that kind of liquidity in the bank, with our liability structure and our asset structure, it makes us as close to impenetrable as we can get, and that’s where we want to be.”

SL Green had planned to use proceeds from the sale of the Daily News Building at 220 East 42nd Street to help fill its cash coffers, but had to find other sources of capital to raise after Jacob Chetrit backed out of the $815 million deal.

Contact Rich Bockmann at [email protected] or 908-415-5229.


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