Underscores Continued Commitment to Strong Manhattan Performers
NEW YORK, Nov. 11 /PRNewswire/ -- SL Green Realty Corp. (NYSE: SLG)
announced today that it has signed a contract with an affiliate of Blackacre
Capital Management LLC to purchase Blackacre's 65% controlling interest for
$66.7 million in 555 West 57th Street, a 20-story Midtown Manhattan property
known as the BMW Building.
Located on the easterly block front of 11th Avenue between West 57th and
West 58th Streets in Manhattan's Midtown West submarket, the BMW Building
offers 950,000 square feet of rentable space, including three subgrade floors,
two of which comprise a 190-car garage. The property is currently 95% leased
and is expected to be approximately 100% leased by closing.
According to Stephen L. Green, Chairman and Chief Executive Officer of
SL Green, "The BMW Building acquisition will provide a cash return of 10% on
total project costs which the Company expects to increase to 11.3% after
lease-up of the one remaining vacant floor. This lease is expected to be
signed prior to closing."
Mr. Green, an 18-year veteran of the Manhattan office building market,
said that he believes the BMW Building is well-positioned to benefit from the
city's westward development along the 57th Street Corridor with entertainment,
retail and office uses. However, he noted that the agreement comes amidst
much speculation about Manhattan real estate, with many predicting a drop in
prices, a result of tightening credit. Mr. Green stressed that handicapping
the direction of prices is a difficult science, and that ultimately, buying
decisions must be based on solid real estate fundamentals. "What we know is
that the 555 West 57th Street property immediately delivers an NOI return that
is right in line with SL Green's growth story and current business plan. The
Company will remain committed to properties that can deliver that kind of
ongoing performance."
Marc Holliday, Chief Investment Officer of SL Green, pointed out that, "We
are buying double-digit returns with leases in place primarily from credit
tenants. Historically, to get that type of return we would have to buy
substantial vacancy and take on leasing risk."
Mr. Holliday acknowledged that financing for many real estate owners has
dried up, or is available on disadvantageous terms. "One of the key points of
the BMW Building acquisition is that, even in an uncertain property financing
market, it comes with assumable underlying first mortgage financing on
attractive terms." He added that SLG has one of the lowest debt-to-market cap
ratios of any major office REIT in the country and has the capital to invest
for the "right" transactions.
BMW, the primary tenant of 555 West 57th Street, occupies 19% of the
20-floor-mid-town property's floorspace, or 183,000 square feet. Originally
built in 1971 as the headquarters building for Ford Motor Company, the
building is now home to BMW's U.S. flagship offices, service center and
showroom. The showroom includes a three-story sloping glass atrium
overlooking 57th Street and 11th Avenue. BMW's investment in its space is
estimated to be in excess of $10 million.
Other tenants include: CBS, Inc., The City University of New York,
St. Luke's Roosevelt Hospital, the Greater NY Hospital and Ticketmaster. Many
tenants have signed long-term leases as evidenced by the fact that 65% of
existing leases expire beyond 2008.
Subsequent to the 555 West 57th Street acquisition, SL Green's portfolio
will consist of 19 properties, encompassing approximately 7.2 million rentable
square feet.
SL Green Realty Corp. is a fully integrated, self-administered and
self-managed real estate investment trust ("REIT") which primarily owns,
manages, leases, acquires and repositions Class B office properties in
Manhattan.
This press release contains forward-looking information based upon the
Company's current best judgment and expectations. Actual results could vary
from those presented herein. The risks and uncertainties associated with the
forward-looking information include the strength of the commercial office real
estate market, competitive market conditions, general economic growth,
interest rates and capital market conditions. For further information, please
refer to the Company's filings with the Securities and Exchange Commission.
SOURCE SL Green Realty Corp.
 back to top
Related links:
http://www.slgreen.com
CONTACT:
Stephen Green, Chairman & CEO, or David
Nettina, President & COO, 212-594-2700, both of SL Green; or
General Info, Paula Schwartz & Michael Lawson, Analyst Info,
Pamela King, or Media Info, Judith Sylk-Siegel, all of The
Financial Relations Board, 212-661-8030
NOTE TO EDITORS: To receive SLG's latest news release and other
corporate documents via FAX -- no cost -- dial 1-800-PRO-INFO.
Use company's symbol, SLG.
|
