New York-based SL Green Realty Corp. has entered into a contract to purchase 603 West 50th Street in Manhattan, a six-story, 160,000-square-foot office property. KCP Holdco, Inc., an affiliate of the seller, which currently occupies the property, will lease-back approximately 40,000-square-feet of office space to serve as its headquarters.
According to a prepared release, SL Green will undertake a full-building repositioning to elevate the profile of this asset. The transaction is expected to close within the next 90 days, subject to customary closing conditions.
Harrison Sitomer, Senior Vice President of SL Green said, “603 West 50th represents another opportunity for us to do what we do best – reposition an asset and create value through effective capital improvements and a targeted leasing strategy. With strategic capital investment, we will transform an underdeveloped property into a competitive class-A building that will attract companies across industries, particularly businesses in the creative industries.”
Built in 1940, 603 West 50th Street is located on 11th Avenue, along the entire block frontage between 50th and 51st street. Upon closing, SL Green will execute a comprehensive renovation program, upgrading the building with state-of-the art infrastructure while enhancing the property’s industrial aesthetic. It is a timber construction building featuring large windows, wood floors and beams, brick perimeter walls, and floors ranging between 22,000 to 28,000 rentable square feet. SL Green has a long-proven track record of successfully repositioning pre-war buildings as creative alternatives, such as the company’s undertaking at 410 10th Avenue.
Marc Goldfarb of KCP Holdco, Inc. commented, “We have known SL Green for years and believe they have the vision to be the best stewards of the asset going forward. It is important to us that we choose an owner that has the necessary experience to renovate and manage the property at a high caliber, particularly since we will continue to call 603 West 50th Street our headquarters.”
SL Green’s acquisition of 603 West 50th Street will be partially funded by proceeds from the sale of 1010 Washington Boulevard in Stamford, CT, which is under contract to be sold for $23 million. This transaction showcases the Company’s ability to reposition the portfolio by exiting non-core assets, recycling capital into higher quality office assets with greater upside potential, in a tax-efficient manner.
Woody Heller and David Heller of Savills Studley advised the seller.