Paramount/Colony Capital JV Closes on $481M Deal for Queens Trophy Tower

A joint venture of Paramount Group Inc. and Colony Capital L.L.C. bought the 50-story, 1.4 million-square-foot asset, which is the tallest New York City building outside of Manhattan.

SL Green Realty Corp. confirmed reports Thursday morning that it has completed the sale of the tallest New York City building outside of Manhattan, the 1.4 million-square foot Queens office tower known as the Citigroup building. A joint venture of Paramount Group Inc. and Colony Capital L.LC., bought the property for $481 million. As part of the transaction, the buyers will also assume $315 million of debt.

SL Green, which had a 30 percent ownership stake in the property, reported that it garnered about $44 million in proceeds from the deal. The Manhattan-based REIT owned the property in joint venture with JPMorgan Chase & Co. The transaction had a somewhat lengthy gestation period; SL Green initially disclosed that the building was under contract last November.

Formally known as One Court Square, the building changed hands most recently in 2007.  SL Green acquired the property early that year when it bought Reckson Associates Realty Corp. for $6 billion, including $2 billion in assumed debt. Designed by Skidmore, Owings & Merrill and completed in 1989,  One Court Square is located across the East River from Manhattan in Long Island City, a section of Queens.  The building is fully leased to Citibank N.A. group, which sold the asset to Reckson in 2005 for about $470 million.

In a statement Wednesday afternoon, Cushman & Wakefield Inc. said that had arranged preferred equity for Paramount and Colony. “The investment features a bond-like income stream, along with a going-in basis well below replacement cost,” said Helen Hwang, an executive vice president in Cushman & Wakefield’s debt, equity and structured finance group.