SL Green Nabs Korean Pension Fund, Hines as JV Partners on One Madison
SL Green Realty Corp. has sold a stake in One Madison Avenue, its planned 1.4-million-square-foot development bordering Madison Square Park, to the National Pension Service of Korea (NPS) and Hines, Commercial Observer has learned.
NPS and Hines acquired a 49.5 percent interest in the $2.3 billion project, with Hines serving as a co-developer, according to information from SL Green. The pair will invest a total of at least $492.2 million of equity into the planned 26-story tower located at the intersection of Madison Avenue and 23rd Street.
The firms are also investors in SL Green’s One Vanderbilt in Midtown, after acquiring a combined 29 percent stake in early 2017.
“We are extremely pleased to bring this world-class team and partnership together again to deliver One Madison Avenue, Midtown South’s most ambitious adaptive-reuse project,” Marc Holliday, SL Green’s CEO, said in prepared remarks. “This joint venture partnership serves as an affirmation of New York City’s market resiliency and SL Green’s ability to execute its business goals in a demanding climate.”
The firm went on a hunt for equity partners last year, with an eye on selling a 45 percent to 49 percent stake, as reported. It noted that it planned to bring on Hines as the development manager and an equity partner.
“Hines and SL Green have worked together for over a decade, and developing One Madison Avenue will be another milestone in our collaborative partnership,” said Jeffrey C. Hines, President and CEO of Hines, in prepared remarks. “Building upon the success of One Vanderbilt, we are excited to move forward with an exemplary tower that will reimagine the Madison Square Park subdistrict.”
Upon completion in 2023, One Madison will feature offices split between the existing historic structure, which will be gut renovated, and a new glass tower with open, column-free space. Construction, which was slated to begin in the first half of the year, has yet to kick off, according to a source familiar with the project. Demolition work is expected to start in the third quarter.
Earlier today, SL Green announced that it entered into a contract to sell its retail condominium at 609 Fifth Avenue to an affiliate of the Reuben Brothers for $168 million. The firm had been “quietly marketing” the asset earlier this year, as reported.