635, 641 Sixth Avenue Bought for $173 Million
SL Green has bought two Midtown South buildings for $173 million as part of its effort to expand into the booming submarket. The two adjoining buildings were once part of a single Ladies’ Mile department store.
The buildings, 635 Sixth Avenue and 641 Sixth Avenue, were bought from Atlas Capital Group, whose other New York holdings include 845 West End Avenue and 24-02 Queens Plaza South.
At 104,000 square feet, 635 Sixth Avenue was the home of the Apex Technical School. Apex recently left the building for Atlas’s 24-02 Queens Plaza South building. This will allow SL Green to redevelop the office space there, following an infusion of capital.
Meanwhile, 641 Sixth Avenue, at 163,000 square feet, is 100 percent occupied by office tenants, including tech firms Google and Infor.
“One of our stated goals in 2012 was to expand our presence in Midtown South, the hottest office submarket in New York with a current vacancy rate below five percent, and this latest transaction further demonstrates our continuing belief in the strength and vitality of the expanding creative, media and technology sectors,” said Isaac Zion, the REIT’s co-chief investment officer.
SL Green President Andrew Mathias said that the acquisitions are “classic SL green-type investments,” sourcing off-market transactions and then underwriting and executing them.
“This is a great example of how we utilize our extensive relationships and know-how to capitalize on opportunities,” Mr. Mathias added.
Together, the buildings have 47,000 square feet of retail space and 184 linear feet of frontage along Sixth Avenue.
Robert Martin, a Manhattan office expert at Jones Lang LaSalle, advised on the transaction. Spokespeople for SL Green, Atlas and Apex didn’t return phone calls in time for publication.