SL Green made some major moves this week to extend its New York portfolio. First it entered into an agreement to expand in the residential market by acquiring a stake in a 23-building, 2.55 million square foot portfolio comprised of 2, 815 rental apartments and 43, 000-square-feet of prime retail space.
As a result of the transaction, SL Green will own a 50% share in both the partnership interests and promotes in the portfolio held through entities affiliated with Stonehenge with Ofer Yardeni retaining the other 50% ownership interest.
The purchase price will be primarily funded through the issuance of $40 million of preferred SL Green operating partnership units. The transaction is expected to close in the first quarter of 2015, subject to customary closing conditions.
David Schonbraun, SL Green’s Co-Chief Investment Officer, said, “This investment represents an incredible opportunity for SL Green to expand its residential portfolio in partnership with a proven operating partner. Over the past few years, we have developed a strong relationship with Ofer Yardeni and Stonehenge Partners.”
“Stonehenge is excited to partner with SL Green again, and this time, in a much greater capacity. I have had the pleasure of working with the company for many years and partnered with them in prior investments, ” said Ofer Yardeni.
The portfolio consists of properties located in the some of the best and most attractive submarkets of Manhattan, including Gramercy Park, the West Village, Chelsea, Murray Hill and the Upper East and West Sides.
The firm also acquired additional ownership interests in the 674, 000-square-foot office condominium at 1745 Broadway, which is leased entirely to Random House.
SL Green, which originally acquired a 32.26% stake in the property in 2007, will increase its ownership percentage to 56.88 percent as a result of the transactions. The majority of the interests, consisting of general partnership and limited partnership interests, were purchased from The Witkoff Group in exchange for SL Green Operating Partnership units. By acquiring these interests the Company has consolidated management of the property.
Completed in 2003, 1745 Broadway is a 50-story building located between 55th and 56th streets. Designed by Skidmore, Owings & Merrill, the building features state-of-the-art infrastructure, efficient column-free floor plates, sweeping river views and it is LEED-EB certified.
The firm also announced the formation of a joint venture for the ownership of condominium units at Tower 46 (55 West 46th Street). The units consist of 347, 000 square feet with office space on floors 2, 22-34 and retail space at grade on 46th Street.
It acquired the newly constructed Class A asset for $295 million in September 2014 and completed that transaction in October 2014.
The tower was designed by Skidmore Owings & Merrill and completed in 2013. The glass and steel structure provides highly efficient column-free space and floor-to-ceiling windows on all office floors with sweeping views of the New York City skyline.