SL Green sells 1250 Broadway to Murray Hill Properties for $310M

Real Estate Weekly, March 12, 2008

SL Green Realty Corp. announced the sale of 1250 Broadway in Manhattan to Murray Hill Properties for $310 million, or approximately $463 per square foot, at a capitalization rate of 4.5%.

Located conveniently near Penn Station on Broadway at 31st Street, 1250 Broadway is a 39-story, 670,000 square foot Class A office tower, boasting an occupancy rate of 99%.

The property sale caps a successful nine-year period of ownership and management by SL Green, during which time the property's value more than tripled. The Company acquired the building in 1999 for $93 million, and then sold a 45% interest to SITQ in 2001 in a transaction that valued the property at $126.5 million.

After executing more than 630,000 square feet of leases and completing a $6.8 million building renovation program, the partners recapitalized the property in October 2006, with an agreed-upon value of $260 million--at which time SL Green's economic stake increased from 54.9% to 66.2% due to the Company's success in exceeding performance thresholds.

The Company expects to recognize an incentive fee of at least $15 million upon consummation of the sale. Marc Holliday, CEO of SL Green commented, "We are very pleased with the outcome of our investment in 1250 Broadway. Our track record there illustrates SL Green's unsurpassed strengths in recognizing latent value in a property and bringing it to full realization. In addition, our working partnership with SITQ has never been stronger. Together we have created substantial value--not only at 1250 Broadway, but also at One Park Avenue and 1515 Broadway. We believe that our most recent joint investment, the acquisition of 388 and 390 Greenwich Street, will prove successful as well."

Cushman & Wakefield acted on behalf of the sellers for this transaction. The sale is expected to close during the second quarter of 2008, subject to customary closing conditions.