A partnership between New York-based Stellar Management Inc. and Boston-based Westbrook Partners has acquired 1370 Avenue of the Americas from a partnership between SL Green Realty Corp. and Blackacre Capital Management, both of New York. New York-based Ackman-Ziff Real Estate Group arranged $80 million in financing from a foreign bank on behalf of Westbrook and Stellar Management.
SL Green reports that it recognized a gain of $8.7 million on its $20 million investment in 1370 Avenue of the Americas. The 35-story, 340,000 sq. ft., Class-A office tower is located on 56th Street in Manhattan's Plaza district.
After taking part in the sale of 1370 Avenue of the Americas, SL Green agreed to acquire One Park Avenue, a 913,000 sq. ft., 20-story office tower, from New York-based Argent Ventures. SL Green will acquire the fee interest in the property, which is subject to a ground lease position held by third parties, and certain mortgage interests in the building for $233.9 million. With the transaction, SL Green has an option to purchase the ground lease. The deal will be financed with a mortgage loan provided by New York-based Lehman Brothers Holdings Inc. and by SL Green's unsecured line of credit.
The property is being purchased at a going-in yield of approximately 10%, and the transaction is immediately accretive to funds from operations. The yield is expected to increase significantly given that One Park Avenue's current rents of $39 per sq. ft. are at least 30% below market. More than 180,000 sq. ft. comprising four floors will be available in 2002.