SL Green bought out its partner at 800 Third Avenue in a deal that values the 41-story office tower at $190 million.
The Marc Holliday-led REIT bought the 39.5 percent stake in the 1970s-era office building from Larry Wohl’s Joseph P. Day, the company announced Friday.
SL Green now owns 100 percent of the 750,000-square-foot property. Along with the buyout, the company modified and extended the tower’s $177 million mortgage.
Chief Investment Officer Harry Sitomer said the transactions exemplify SL Green’s long-term outlook on what the real estate firm considers to be well-located Midtown Manhattan assets.
“We continue to see strong momentum on Third Avenue, with residential conversions helping reposition the corridor for strong office sector growth,” he said in a statement.
There are a number of office conversions in the works along Third Avenue, which was hit hard with vacancies during the pandemic.
Nearby, SL Green is converting the tower it owns at 750 Third Avenue into 680 apartments. At 845 Third Avenue, Rudin is turning the building into 411 units.
Those projects, along with others in Midtown, have taken supply off the market and helped to improve conditions for the remaining office properties in the area.
Current tenants at 800 Third include investment advisor Kimelman & Baird, management firm Renaissance Technologies and law office Kobre & Kim. Asking rent for a lease last January was in the mid-$70s per square foot, according to the Commercial Observer.
SL Green acquired a stake in 800 Third Avenue in 2006, when it created a partnership with owners Joseph P. Day Realty Corp. and the estate of Norman Levy. That initial investment, valued at $102.4 million, came in the form of a loan secured by a 47 percent interest in the building. SL Green had the option to convert the mortgage into equity.
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