SL Green Eyes Property Sales Next Year

Top Manhattan office landlord SL Green is turning into a seller as interest rates remain burdensome and a dividend cut looms.

Marc Holliday’s firm is looking to unload nine properties in the borough, Crain’s reported. The revelation came in a recent investor presentation, where Chief Financial Officer Matthew DiLiberto said the company was “selling assets [and] losing [income] to fight against interest rates that are too high.”

That doesn’t necessarily mean SL Green is done buying. Though it is seeking to unload roughly $2.5 billion of property, the company also plans to make $1 billion worth of acquisitions, according to executives.

“We’re ready to deploy our $1.3 billion debt fund, have a goal of more than $1 billion in acquisitions and are even considering share buybacks,” the company said in a statement.

Among the properties SL Green is putting up for sale:

1350 Sixth Avenue, a 600,000-square-foot office building in the Plaza District.
245 Park Avenue, a 1.7-million-square-foot property within a famed corridor. SL Green acquired the property out of bankruptcy in 2022 and sold 50 percent of the equity in 2023 to Japanese developer Mori Trust in a deal that valued the tower at $2 billion. This time, SL Green is eyeing a 25 percent stake sale.
750 Third Avenue, which is in the process of being converted into 680 apartments. SL Green would look to hand off a 65 percent stake in the redevelopment.

The timing for SL Green could prove bountiful as Manhattan’s office market stands above the rest of the country. The office vacancy rate in Manhattan is 13.1 percent, according to Moody’s, compared to 19.3 percent across the nation.

But SL Green, which reportedly carries $7 billion in liabilities, has seen its stock price dip by a third this year. There are concerns the real estate investment trust could cut its dividend next year as cash flow diminishes for the landlord.

— Holden Walter-Warner