SL Green Sells Stake in 1.8 MSF Manhattan Tower

245 Park Avenue. Image courtesy of CommercialEdge

SL Green Realty Corp. has sold a 49.9 percent stake in 245 Park Ave., a 1.8 million-square-foot Midtown Manhattan office tower. A U.S. affiliate of Mori Trust Co., a Tokyo-based developer and investor, bought the equity interest in the 45-story property. The deal values the asset at $2 billion.

The sale is a key step in SL Green’s planned repositioning and redevelopment of the property, which will encompass architectural features, infrastructure and amenities. The REIT purchased the asset from Chinese investment conglomerate HNA Group in September of 2022 for $1.8 billion, subject to a $1.2 billion loan provided by Wilmington Trust, according to CommercialEdge information.

Makeover moves

Completed in 1966, 245 Park Ave. previously underwent renovations in 2000 and 2006, CommercialEdge shows. At present, the LEED Gold-certified property is sectioned into 37,000- to 79,508-square-foot floorplates, leased to tenants in banking and finance. The property also features 68,000 square feet of retail space. With full entrances opening out to both Park and Lexington Avenues, 245 Park Ave. is situated on a high-traffic corridor in the nation’s largest commercial district.

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Kohn Pedersen Fox Associates, a longtime SL Green partner, will oversee the design of a new podium façade, lobbies within both of the building’s entrances, as well as new exterior windows and retail storefronts, along with infrastructure upgrades. Amenities similar to those at One Vanderbilt, SL Green’s three-year-old Midtown trophy tower, will be offered at the renovated property.

In a statement, SL Green Chief Investment Officer Harrison Sitomer noted that the renovations are motivated in part by a large-scale tenant flight to amenity-focused, well-positioned office space that is convenient to commuters.

The sale of half of the ownership of 245 Park Ave. marks the largest piece of this year’s financial plan for New York City’s largest office owner. In April, the firm landed $500 million for the refinancing of 919 Third Ave., a 1.5 million-square-foot trophy office tower. In September of 2022, SL Green sold the entirety of 885 Third Ave. to Memorial Sloan Kettering Cancer Center.