New York City-based SL Green Realty Corp, a real estate investment trust, has recapitalized 2 Herald Square, a Manhattan office and retail property, for $150 million. Also, SL Green has sold a 49 percent interest stake in the property to an unnamed Israeli institutional investor.
NEW YORK–(BUSINESS WIRE)–SL Green Realty Corp. (NYSE:SLG), New York City’s largest office landlord, today announced that it has secured $150 million of first mortgage financing for 2 Herald Square, and sold a 49% partnership interest to an Israeli institutional investor. The recapitalization is the first step of a value-add capital program that will restore iconic status to this best-in-class building located on one of the most prominent corners in New York.
In addition, SL Green announced the signing of four transactions at the Property, totaling 177,081 square feet:
(i) the execution of an agreement to convey a 30-year leasehold condominium covering 95,370 square feet to Mercy College;
(ii) the signing of a new 29,388-square-foot lease to expand WeWork; and,
(iii) the signing of new retail leases with Victoria Secret and with Happy Socks, filling a recaptured Sixth Avenue lobby space that SL Green converted into a retail opportunity.
Mercy College’s 30-year transaction covers the building’s third, fourth and seventh floors and brings Mercy’s total footprint to 95,370 square feet from its existing 55,000 square feet.
As part of the transaction, Mercy will also receive a new dedicated 34th Street lobby by relocating its ground floor entrance and absorbing a portion of previously vacant retail space.
WeWork has expanded its footprint within the building with a new 29,388-square-foot lease. Amazon, through WeWork’s enterprise client account, currently occupies 122,903 square feet across floors eight through 11 and the penthouse. Following the lease expansion, WeWork will also occupy a new dedicated lobby space located on 35th Street.
Building on the momentum already started from Victoria’s Secret’s recent corner extension, Happy Socks signed a new retail lease on Sixth Avenue, fronting Herald Square. Together, these transactions raise the building occupancy to 93.2%.
“Following our successful acquisition of the leasehold at 2 Herald Square, we executed our business plan ahead of schedule by expanding existing tenants from within as well as adding a new tenant to our roster,” said Brett Herschenfeld, Managing Director at SL Green, who continued. “In just six months, we have shown that with strong management and capital investment, this asset in a prime Herald Square location immediately attracts global capital and tenants.”
Located on a corner of Herald Square – at the intersection of Sixth Avenue, Broadway, and 34th Street – 2 Herald is a 369,000-square-foot office and retail asset at one of Manhattan’s busiest locations and most vibrant retail and office submarket.
About SL Green Realty Corp.
SL Green Realty Corp., an S&P 500 company and New York City’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of September 30, 2018, SL Green held interests in 106 Manhattan buildings totaling 46.4 million square feet. This included ownership interests in 28.2 million square feet of Manhattan buildings and 18.2 million square feet of buildings securing debt and preferred equity investments. In addition, SL Green held ownership interests in 15 suburban buildings totaling 2.3 million square feet in Brooklyn, Westchester County, and Connecticut.