SL Green JV Wraps $2.3B Office Redevelopment

A joint venture of SL Green Realty Corp., National Pension Service of Korea and Hines has completed the $2.3 billion redevelopment of One Madison Avenue, a 1.4 million-square-foot office building in Manhattan’s Gramercy Park.

SL Green received $577.4 million for reaching this milestone, as a final equity payment from its joint venture partners, which was used to repay corporate unsecured debt.

The joint venture financed the redevelopment with a $1.3 billion loan from Wells Fargo Bank in 2020, according to CommercialEdge data.

Initially built in 1909, the property rises 27 stories and features 100,000-square-foot floor plates and 40,000 square feet of retail space, which will include a 16,000-square-foot steakhouse by Michelin-starred Chef Daniel Boulud. The project was designed to achieve LEED Gold and WELL certifications. It will include a 7,000-square-foot amenity space and an 11,000-square-foot roof deck. The project was completed three months ahead of schedule.

Earlier this year, Palo Alto Networks signed a full-floor lease at One Madison, bringing the total occupancy to 59 percent.

Other large tenants include Franklin Templeton, which signed a 15-year lease for 347,474 square feet in September last year and IBM Corp., which agreed to 328,000 square feet on a 16-year lease signed in March 2022.

Part of Midtown Manhattan

Located in Midtown South, the building occupies an entire city block and is adjacent to Madison Square Park. It is also near multiple subway lines and within walking distance of numerous dining and retail options.

As of August, Manhattan had 6.5 million square feet of office space under construction, representing 1.4 percent of its total stock, according to a recent CommercialEdge report. The borough had the highest asking rates in the nation at $69.58, down 2 percent year-over-year, the same source shows.