SL Green Gobbles Up 500 Park Office Condo for $130M

SL Green joined the shopping spree of commercial investors, picking up a boutique office condominium on Park Avenue.

The landlord acquired the office portion of 500 Park Avenue from Morgan Stanley for $130 million, the REIT announced on Tuesday. The deal comes two months after the bank put the 11-story condo up for sale, hoping to score at least $125 million.

The sale of the 201,000-square-foot office condo breaks down to $647 per square foot.

In a statement, SL Green chief investment office Harrison Sitomer noted the “fortress corridor” of Park Avenue “attracts top-tier tenants and triple-digit rents.” Tenants at 500 Park Avenue include Vera Wang, the Georgetown Company and Friedland Properties. Furniture company Frato has a showroom in the building’s retail space.

A Newmark team including Adam Spies and Doug Harmon advised on the deal.

Developed in 1960, 500 Park initially rose as the headquarters of PepsiCo Inc. Above the lower floors’ office and retail space are 56 residential condominium units, which were not part of the recent deal.

As of September, the building was 95 percent occupied. It was last renovated in 2019.

The offering memorandum for the property suggested a buyer could upgrade the lobby and add amenities to take advantage of “strategic rent growth potential.” That’s exactly what SL Green intends to do, as well as improve the public plaza.

While Thanksgiving can be a time for things to slow down, SL Green has been particularly busy in recent days.

The real estate investment trust sold an 11 percent stake in One Vanderbilt to Japan’s Mori Building Company. The deal valued the trophy Midtown office tower at $4.7 billion.

Last week, SL Green also finalized the extension and modification of a $743 million loan backing the property at 1515 Broadway. SL Green was able to keep its 3.93 percent interest rate while the maturity date was pushed into March 2028, a three-year extension.

Also last week the company announced it would sell $400 million in stock. It intends to use the proceeds for general corporate purposes, which may include new debt and equity investments and to repay debt.