SL Green, Morgan Stanley Strike $130M Deal
SL Green Realty Corp., Manhattan’s largest office landlord, is expanding its Park Avenue portfolio with the purchase of the office portion of 500 Park. Ave., an 11-story, 201,000-square-foot Class A office building, from Morgan Stanley for $130 million. A closing date for the deal was not disclosed.
The REIT has entered into a contract to buy the office condo at the building, which also has 19,911 square feet of retail. The retail portion of the building at the corner of 59th Street in the Plaza District was not included. There are also 56 residential condominium units that were also not part of the office deal.
Newmark’s Adam Spies, Doug Harmon, Adam Doneger, Joshua King and Marcella Fasulo advised on the transaction.
Building, market highlights
SL Green plans to reposition the lobby, add building amenities and make substantial improvements to the public plaza.
Morgan Stanley has owned the building since April 1980, acquiring it from HJ Kalikow Co., according to CommercialEdge data. The same source shows that the property is subject to a 99-year unsubordinated net ground lease, which is held by Kalikow Holdings and expires in March 2079.
Completed in 1959, it has been institutionally owned and maintained since its construction as the former PepsiCo Inc. headquarters. The historic, landmarked building was designed by Skidmore, Owings & Merrill. Floorplates in the glass and masonry building range from 14,800 to 19,684, according to CommercialEdge. The property had a cosmetic renovation in 1984. Its last renovation was in 2019, The Real Deal reported.
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SL Green’s other Park Avenue properties include 100 Park Ave., 125 Park Ave., 245 Park Ave., 280 Park Ave., and 450 Park Ave. The REIT also owns 215 Park Ave. South and 304 Park Ave. South. Last year, an affiliate of Mori Trust Co. purchased a 49.9 percent stake in 245 Park Ave., a 1.8 million square-foot tower.
Park Avenue is the best office market in New York City with historic low vacancy, according to SL Green, and 500 Park Ave. is set to benefit from opportunities in the fortress corner that attracts top tier tenants and triple-digit rents.
Building tenants include Vera Wang leasing 26,708 square feet for office space and a showroom; The Georgetown Co.,18,795 square feet; CI Capital Partners, 19,158 square feet; PPC Enterprises, 18,683 square feet, and Friedland Properties, CommercialEdge data indicates. Rents are about $109.58 per square feet, according to the same source. The property’s retail space features high-end furniture store FRATO’s flagship New York City showroom.
SL Green moves
The acquisition announcement comes days after SL Green sold an 11 percent ownership stake in One Vanderbilt, its 1.7 million-square-foot skyscraper in Midtown Manhattan, to Mori Building Co. in a deal that valued the tower at $4.7 billion. SL Green will continue to own a 60 percent stake in the 59-story tower that was fully leased at the time of the closing. The National Pension Service of Korea owns a 27.6 percent stake and Hines owns 1.4 percent. The LEED Platinum-certified building come online in 2020.
Last month, Bloomberg LP signed a renewal and expansion lease at another SL Green Midtown Manhattan tower – 919 Third Ave. Bloomberg’s latest deal brings its footprint at the 1.5 million-square-foot, 47-story office tower to 924,976 square feet. The deal includes a 749,035-square-foot, 11-year lease extension starting March 1, 2029, and a new 175,841-square-foot 15-year expansion.
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