SL Green Sells Manhattan Office Property for $325M

635-641 Sixth Ave. Image via Google Street View

SL Green Realty Corp. has agreed to sell a pair of adjoining office towers in Midtown Manhattan for a total price of $325 million, in a deal that hints at recovering demand for Class A offices in the city.

The REIT, Manhattan’s largest office landlord, is selling 635-641 Sixth Ave., two eight-story buildings totaling 267,000 square feet and fronting Sixth Avenue from 19th to 20th Streets. CBRE’s Darcy Stacom, William Shanahan and Doug Middleton represented SL Green in the transaction, which is expected to close during this quarter and generate net cash proceeds to the seller of around $312.5 million.

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Located in the Chelsea neighborhood in Midtown South, the property is now 94 percent leased, SL Green said in a statement. The asset is anchored by enterprise firm Infor through 2030, after the company’s recent lease renewal and extension. Other tenants include Microsoft, EvensonBest, Teknion Inc., and a Staples store, according to SL Green’s website.

SL Green acquired the 1902-vintage property, formerly the Simpson Crawford Department Store, for $173 million in 2012 and three years later completed a redevelopment that brought a new lobby, elevators, modernized building systems and a penthouse roof with an outdoor event space. The property is located nearby Madison Square Garden and the 23rd Street subway station.

Midtown activity 

The latest announcement comes after a busy week for SL Green, which holds interests in 84 buildings totaling 37.8 million square feet, including 28.3 million square feet of Manhattan buildings as of March 31. The REIT recently signed up IBM spinoff Kyndryl for a 22,531-square-foot, nine-year lease at One Vanderbilt, its massive new Midtown skyscraper connected to Grand Central Terminal.

On Tuesday, the company revealed plans for Summit One Vanderbilt, an observatory at the crown of the 1,401-foot-tall tower that will be launching on October 21. The company also disclosed last Friday that its Chief Investment Officer David Schonbraun will step down by the end of the second quarter, after working for SL Green for nearly two decades.