SL Green Unloads 49 Percent Stake in Daily News Building
By Rebecca Baird-Remba July 22, 2021 11:24 am
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After SL Green Realty Corp.’s deal to sell the Daily News Building to Jacob Chetrit collapsed, the real estate investment trust has offloaded a 49 percent interest in the office property at 220 East 42nd Street to a real estate fund managed by Meritz Alternative Investment Management.
SL Green (SLG) will hold on to a 51 percent interest in the 37-story Art Deco skyscraper and continue to handle its leasing and management, the company announced Thursday morning. The minority stake in the building traded for $790 million and the sale generated $136 million in cash proceeds for SL Green, per the press release.
“This transaction demonstrates the continued global demand for core New York City office properties, particularly those that are well leased on a long-term basis to credit tenants,” Harrison Sitomer, a senior vice president at SL Green, said in a statement. “With the new joint venture, 220 East 42nd Street will continue to provide SL Green shareholders with steady contractual cash flow.”
Jun Hyun Shin, CEO of Meritz Alternative Investment Management, said in a statement that his company had a “firm belief in the success of the New York City market,” and that this was its fourth partnership with SL Green.
Cushman & Wakefield’s Adam Spies, Doug Harmon, Marcella Fasulo, Josh King and Avery Silverstein advised SL Green in the transaction.
SL Green purchased the building for $265 million back in 2003 and decided to sell the 1.1 million-square-foot tower to Jacob Chetrit for $815 million in 2019, as Commercial Observer reported at the time. Ultimately, Chetrit couldn’t secure financing for the deal, which was supposed to close in late March of 2020, because the pandemic froze the debt markets that same month. Then, SL Green took Chetrit to court to recover a $35 million deposit from escrow, but decided to settle the lawsuit in September.
The building, which is 93 percent leased, was refinanced with a $510 million mortgage from Aareal Capital Corp. in June 2020.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.
