SL Green Secures $1.25B Mortgage Extension on One Madison

It’s good to be SL Green (SLG) right now. 

New York City’s largest office real estate investment trust (REIT) announced on Tuesday that it secured a loan modification and extension on its $1.25 billion mortgage on One Madison Avenue, a 1.4 million-square-foot, historic mixed-use building between East 23rd and East 24th streets in Manhattan. 

SL Green announced the news in a press release Tuesday morning. 

SL Green secured the mortgage extension from a consortium of 14 banks, led by Wells Fargo (WFC), with terms that brought the final maturity date to November 2027, and that kept the interest rate at 3.1 percent over the term of the secured overnight financing rate (SOFR). 

“The loan modification provides mechanisms to facilitate stabilization of the property and furthers our goal of extending our near-term maturities while keeping rates unchanged,” said  Robert Schiffer, executive vice president of development of SL Green, in a statement. 

One Madison Avenue first opened in 1893, and, at 27 stories with its famous clock tower, was briefly the tallest building in the world. The building was rebuilt in limestone and granite in 1953, and used by Metlife for much of the 20th century. SL Green purchased the building in 2005.  

Beginning in 2020, at the nadir of office usage during COVID-19, SL Green began an ambitious $2.3 billion plan to renovate the entire office property, combining a new 18-story, 500,000-square-foot glass-facade into the original limestone and granite exterior while renovating the entire building from within. 

The REIT was joined by joint venture partners Hines and National Pension Service of Korea on the redevelopment. 

SL Green completed the renovation three months ahead of schedule in September 2023, and reopened with tenants such as Chelsea Piers Fitness, IBM, Coinbase and Franklin Templeton secured through long-term leases. The building includes Le Jardin Sur Madison, an event space and rooftop garden overlooking Madison Square Park; and the restaurant La Tête d’Or by Daniel, featuring cuisine from chef Daniel Boulud. 

The building’s tower floors and retail spaces are 100 percent leased, while the overall property leasing stands at 65 percent, according to SL Green.  

Kara McShane, Wells Fargo executive vice president and head of CRE, called One Madison a “transformative project,” in a statement and added that it provides “unparalleled office space adjacent to Madison Square Park.” 

The news of the loan modification at One Madison comes just weeks after SL Green reported strong third quarter earnings. The office REIT reported $78.6 million in funds from operations — a figure used by real estate investment trusts to designate cash flow — in the quarter, and $437.9 million for the first nine months of 2024, an increase of $146 million from its performance in the first nine months of 2023. 

SL Green reported that it expects occupancy across its portfolio to reach 92.5 percent by the end of the year, outpacing the 90 percent occupancy rate the firm has reported for all of 2023 and much of 2024. 

Brian Pascus can be reached at bpascus@commercialobserver.com