New York—Manhattan’s largest commercial property owner, SL Green Realty Corp., is sharing a piece of the pie, selling a 49 percent ownership stake of one of its rental properties to BlackRock Real Assets, the real assets arm of investment manager BlackRock Inc.
SL Green’s sale of the ownership interest in 400 E. 57th St. was valued at $170 million. HFF’s Andrew Scandalios and Rob Hinckley represented SL Green in the transaction. New York Community Bank also provided a 10-year, $100 million mortgage loan at a 3 percent fixed interest rate.
“BlackRock continues to target high-quality assets in major markets as a means of seeking to deliver attractive risk-adjusted returns to our clients. The 400 East 57th Street investment fits very favorably within our investment strategy given its gateway market location, current income and the potential for future value creation,” said Benjamin Young, managing director and head of U.S. real estate separate accounts at BlackRock Real Assets.
He added that BlackRock plans to partner with SL Green to upgrade units and enhance common areas and amenities. Stonehenge Partners is SL Green’s current partner in the asset, which is named Stonehenge 57. As a result of the transaction, SL Green now owns 41 percent and Stonehenge owns 10 percent of the property
“Investor demand for high-quality, well-located rental apartments in Manhattan continues to be robust,” said SL Green Co-Chief Investment Officer David Schonbraun. “Along with our current partner, Stonehenge Partners, we have been able to create value through renovating and repositioning the property. This transaction allows us to capitalize on some of the value created, while maintaining future upside through our remaining equity stake.”
Stonehenge 57 is a 19-story building located on First Avenue, taking up the entire east side block of 56th and 57th streets. The property offers 261 luxury apartments and 13,772 square feet of ground-level retail. Rents start at $2,511 for studios, $3,495 for one bedrooms and $5,644 for two bedrooms. Three-bedroom rents were unavailable.
SL Green reportedly bought the property for $109 million as part of a portfolio deal in 2012 with Stonehenge Partners and Wharton Properties. SL Green also acquired a 50 percent stake in Stonehenge’s 23-building, 2,815-unit portfolio, which included 43,000 square feet of retail, in December 2014. The partnership also teamed up to renovate 1080 Amsterdam, a 95-unit apartment building in Manhattan’s Morningside Heights neighborhood in May 2014.