SL Green Continues 2 Herald Square Momentum With Mercy College Expansion
By Cathy Cunningham December 3, 2018 6:30 am
reprints
It’s all go at 2 Herald Square.
After scoring $150 million of first mortgage financing from MUFG Union Bank in November to recapitalize the asset, SL Green Realty Corp. has now completed four transactions totaling 177,081 square feet at the property, Commercial Observer has learned.
The recent recapitalization was the first step in a value-add capital program to restore the iconic building—at the intersection of Avenue of the Americas, Broadway and 34th Street—to its former glory, and recent leasing activity at the property brings its occupancy up to 93.2 percent.
The landlord just transferred a 30-year leasehold condominium to Mercy College, expanding the college’s total footprint to 95,370 square feet (from 55,000 square feet) on the building’s third, fourth and seventh floors. As part of the deal, Mercy will also nab a new dedicated lobby on 34th Street.
New retail leases have also been executed with Victoria’s Secret and with Happy Socks, which will occupy a Sixth Avenue lobby space that SL Green converted into a retail opportunity.
And, as previously reported by CO, SL Green signed a new 29,388-square-foot expansion lease with WeWork last week. The coworking provider currently leases the entirely of its 122,903 square feet space to Amazon. Following the recent lease expansion it will also receive a new dedicated lobby space on 35th Street.
SL Green acquired 2 Herald Square’s leasehold interest in May—paying approximately $270 million, The Real Deal reported—after outbidding several other interested investors. It sold a 49 percent partnership interest in the property to an unnamed Israeli institutional investor.
“Following our successful acquisition of the leasehold at 2 Herald Square, we executed our business plan ahead of schedule by expanding existing tenants from within as well as adding a new tenant to our roster,” Brett Herschenfeld, a managing director at SL Green, said in prepared remarks.“In just six months, we have shown that with strong management and capital investment, this asset in a prime Herald Square location immediately attracts global capital and tenants.”
