New York City-based SL Green Realty Corp., New York City’s largest office landlord, recently revealed that it had entered into a contract to sell 220 E. 42nd St. in Midtown Manhattan for $815 million, or approximately $715 per square foot. The transaction is expected to close in the first quarter of 2020.
Located on the corner of 42nd Street and Second Avenue, 220 East 42nd Street, also known as The News Building, is a 37-story art-deco skyscraper that was originally the headquarters for The New York Daily News. SL Green purchased the property in February 2003 for $265 million, following its initial $53.5 million preferred equity investment in September 2001.
According to a prepared statement, the company then commenced a multi-year repositioning and retenanting of the property. Currently boasting occupancy of 97 percent and the highest net operating income since SL Green’s acquisition, the building’s tenant roster includes the Visiting Nurse Service of New York, Omnicom Group, local television station WPIX and the United Nations.
SL Green’s Co-Chief Investment Officer, Isaac Zion, commented, “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.”
Adam Spies and Doug Harmon of Cushman & Wakefield along with Robert Verrone of Iron Hound Management facilitated the transaction.
As of June 30, 2019, SL Green held interests in 96 Manhattan buildings totaling 46 million square feet. This included ownership interests in 27.2 million square feet of Manhattan buildings and 18.8 million square feet securing debt and preferred equity investments. In addition, SL Green held ownership interests in 7 suburban properties comprised of 15 buildings totaling 2.3 million square feet in Brooklyn, Westchester County, and Connecticut.