SL Green Sells Interest in 2 Manhattan Communities
- Apr 23, 2021
SL Green has continued its divestment strategy of non-core assets and sold its interest in two residential buildings in Manhattan.
In New York City’s Hell’s Kitchen neighborhood, SL Green sold its 20 percent interest in 605 W. 42nd St., a 71-story community that’s also known as Sky. The sale is expected to generate net cash proceeds of approximately $53 million for the REIT with the building being valued at $858.1 million.
An Eastdil Secured team led by Gary Phillips and Will Silverman represented SL Green in the transaction, which is scheduled to close in the second quarter of 2021.
The luxury multifamily tower is 90 percent occupied and offers 295 units of dedicated affordable housing in studio, one- and two-bedroom floorplans. The 948,000-square-foot community includes a pool, gym, yoga studio, lounge, business center rooftop access, valet services and 68,000 square feet of retail space. SL Green acquired the 20 percent interest in Sky in 2016 following its previous mezzanine loan on the property.
On the east side of Manhattan, SL Green also sold its interests in 400 E. 57th St. The REIT will receive $18 million in net cash proceeds from the sale, which valued the community at $133.5 million. An Ackman-Ziff team led by Marc Sznajderman represented SL Green in the sale, which is expected to close in the third quarter of 2021.
The Sutton Place community offers 263 units in studios, one-, two- and three-bedroom floorplans as well as approximately 10,000 square feet of retail space. The residential portion of the building is 70 percent occupied and the retail space is currently leased to essential service providers, according to SL Green. Residents also get access to a fitness center, lounge and children’s playroom.
David Schonbraun, SL Green’s chief investment officer, said in prepared remarks that the company has seen a rebound in the residential market in recent months, showing a continued demand for New York City real estate.
Schonbraun also said in prepared remarks that the two sales were a part of the company’s strategy to divest its non-core assets and reinvest the capital into development projects and its share repurchase program.
As part of this strategy, SL Green entered into a contract in July 2020 to sell 400 E. 58th St., a 126-unit community also in Sutton Place, for $62 million.
Earlier that year, SL Green also entered an agreement to sell The Olivia, a 333-unit community on Manhattan’s Chelsea neighborhood, to Brookfield Asset Management for $446.5 million.