SL Green Closes Sale of NYC's 390 KSF 10 E. 53rd

February 28, 2012
By Barbra Murray, Contributing Editor

SL Green Realty Corp. continues its busy year with the $252.5 million purchase of the 390,000-square-foot office tower at 10 E. 53rd St. in Midtown Manhattan. The REIT followed the closing with the sale of a 45 percent interest in the Class A building to Canada Pension Plan Investment Board for $57.4 million.

The 37-story building, developed in 1972, is 91 percent leased and counts publisher Harper Collins as a tenant. With leases accounting for 60 percent of the office space scheduled to expire over the next three years, SL Green and CPPIB are in a position to capitalize on the rising office rental rates in Manhattan. As per a report by commercial real estate services firm CBRE Group, the average asking rent in Midtown increased $1.22 in January, in part due to the repricing of available space.

The partners plan to commence a capital improvement program at 10 E. 53rd St. and reposition the asset as a boutique office property, highlighting its capacity to provide full floor identity with floor plates ranging 8,400 to 16,300 square feet. “We believe that the prestige and value of quality properties in the Plaza District of Midtown Manhattan is unparalleled,” Andrew Mathias, president of SL Green, noted in a prepared statement. “The chance to add an additional Plaza asset to our core portfolio does not come along often and upon being presented with this unique opportunity, we took it.”

SL Green’s purchase of 10 East 53rd St. is the company’s third joint venture acquisition so far this year.  On Feb. 1 of this year, the REIT announced that it had wrapped up the purchase of the 65,000-square-foot retail property at 724 Fifth Ave. with Jeff Sutton as part of a $416 million, eight-property retail and residential portfolio acquisition. The day before, SL Green, in partnership with Stonehenge, revealed the completion of the purchase of the seven properties accounting for the larger segment of the portfolio.

As for SL Green’s partnership purchase of 10 East 53rd St with CPPIB, the deal marks the second time the companies have joined forces. In a 2010 agreement valued at $663 million, SL Green sold CPPIB a 45 percent interest in 1221 Avenue of the Americas for $576 million, and a 45 percent stake in 600 Lexington Ave. for $87 million.