SL Green Sells Midtown Office Tower for $815M

SL Green is currently negotiating the sale of its Midtown Manhattan office space at 220 East 42^nd Street with Jacob Chetrit of the New York-based Chetrit Organization. The announced $815 million sale price translates to roughly $715 per square foot for the 37-story tower. Cushman & Wakefield’s Adam Spies and Doug Harmon, and Iron Hound Management’s Robert Verrone arranged the transaction; Verrone is also responsible for securing financing for the deal. According to SL Green, the sale should close in the first quarter of 2020.

Isaac Zion, SL Green’s co-chief investment officer, said, “The sale of the historic News Building demonstrates the continued demand—both international and domestic—for large, fully stabilized assets in East Midtown, Manhattan’s preeminent business district. This sale also furthers our strategy of selling assets into a healthy investment market and using the proceeds from these sales to repurchase deeply discounted shares of our stock while maintaining a low leverage profile.”

News Building, 220 East 42nd Street, New York

Formerly known as the News Building, the 1.1-million-square-foot office tower was on the market throughout the summer with an initial asking price between $900 million and $1 billion. It last traded in 2003 for $265 million, and was later renovated in 2014. SL Green currently holds a majority 68.38% ownership stake in the 1928 Art Deco building; the remaining 31.62% is held by Visiting Nurse Services, American Jewish Joint Distribution Committee and Community Preservation.

The property is 97% leased, with local television station WPIX and its parent company, Tribune Media Company, as well as Omnicom Group and the United Nations among its tenants. Designed by architects Raymond Hood and John Mead Howells, the News Building was formerly the headquarters of the New York Daily News. It houses one of the world’s largest indoor globes and was featured as the location of the Daily Planet headquarters in the 1978 movie, “Superman.”