SL Green shopping Amazon-anchored office in Hudson Yards

Landlord acquired a majority stake in 2018, in deal valuing property at about $440M

New York /
Jul.July 31, 2020 10:30 AM
410 Tenth Avenue and SL Green CEO Marc Holliday (410 Tenth via Google Maps; Holliday via SL Green)

410 Tenth Avenue and SL Green CEO Marc Holliday (410 Tenth via Google Maps; Holliday via SL Green)

SL Green Realty, which has been bulking up its coronavirus cushion, is looking to sell an office property in the Hudson Yards area for $1.1 billion.

The office landlord is marketing 410 Tenth Avenue, which is anchored by Amazon, Business Insider reported. SL Green acquired a majority interest in the 640,000-square-foot building in 2018, valuing the property at about $440 million. SL Green then leased over half of the building’s space to Amazon.

Analysts say attaining an attractive price for SL Green would send a message that the real estate investment trust, led by CEO Marc Holliday, is not down for the count.

“They want to demonstrate they’re creating value and that the public markets are discounting the stock too heavily,” BMO Capital Markets analyst John Kim told the paper.

In its second quarter earnings call, SL Green announced it would resume a $3 billion program to buyback its shares, which were trading at about $47.31 at the market’s open on Friday, down from a 52-week high of $96.39. The firm reported net income per share of $0.74 for the second quarter, down from $1.94 a year before.

The outlook for office landlords is unclear. Google announced this week that its 200,000-strong workforce would stay home until at least summer 2021. On Thursday, listings giant Zillow announced that its employees can work remotely forever. And few workers have returned to office buildings in New York City despite being allowed to do so.

But SL Green is one of the few firms to get a deal done during this period. In May, it sold a 49.5 percent interest in One Madison Avenue, which it plans to redevelop. The company also offloaded loans from its debt business. [BI] — Georgia Kromrei


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