SL Green JV Closes $445M Purchase of Manhattan Tower

450 Park Ave. Image via Google Steet View

SL Green Realty Corp. is right on time as it reveals that is has completed the acquisition of 450 Park Ave. in Midtown Manhattan just days before the previously announced deadline of the end of the second quarter of 2022.

The company revealed two months ago in April that it would buy the premier 337,000-square-foot office and retail high-rise from Oxford Properties for $445 million. And as SL Green had predicted at the time, the company had no problem finding joint venture partners to help capitalize the transaction.

SL Green closed the purchase of 450 Park, an Emery Roth & Sons-designed architectural landmark with pride of place on one of the most prestigious stretches in the world, in a joint venture with unidentified institutional investors from South Korea and Israel.

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Harrison Sitomer, chief investment officer of SL Green, noted in a prepared statement that the international demand to partner on the acquisition of 450 Park demonstrates that New York City continues to maintain its position as one of the most sought-after real estate markets and a safe haven for long-term capital deployment.

With the global investment community focused on high-quality assets, according to CommercialEdge, Manhattan recorded more than $1 billion in office sales in the first quarter of 2022. “Investors and institutions are signaling confidence in office assets in gateway markets like Los Angeles, New York, the Bay Area and Washington, D.C.,” according to a May 2022 research brief by Marcus & Millichap. “[In the last 12 months] sales reached the highest level since at least 2018 for Chicago, New York City and Los Angeles office properties.”

Shiny new toy

The partners relied on a $267 million senior mortgage loan through a consortium of financial institutions led by Wells Fargo Bank NA to finance the purchase of the 33-story luxury office tower.

With the purchase of 450 Park, SL Green adds an office property to its portfolio for the first time since 2018. The REIT holds a 25.1 interest in the asset and will spearhead leasing and management responsibilities on behalf of the partnership. SL Green will also lead a new capital investment program at the property, which will entail the development of a new amenity offering that will offer tenants high-quality, tailored programs and services. Among those on the receiving end of those services will be Oxford Properties, which is counted among 450 Park’s list of notable tenants.