SL Green Realty Corp (SLG) To Sell Brooklyn Office Building
Zacks Investment Research | Aug 11, 2017 04:29AM ET
SL Green Realty Corp. (NYSE:SLG) announced that it has entered into an agreement to sell the 16 Court Street office property to CIM Group, for a gross price of $171 million. The disposal transaction is expected to close in fourth-quarter 2017. CIM Group is a full service real estate and infrastructure fund manager.
The property, a 36–story 317,600 square foot office building, is located in Brooklyn, NY. SL Green bought this office space in 2007 through a joint venture for $107.5 million before gaining full ownership in 2013.
SL Green strategically improved the building by putting a renovation plan in place. In addition to other improvement, the plan included a lobby and elevator upgrade. Such transformative redevelopments helped enhance the building’s profile and attract new tenants. This building is currently 94% occupied.
This transaction is anticipated to generate approximately $164.0 million cash proceeds for SL Green. It further highlights the company’s ability to tap opportunities and unlock value in its New York City office building deals. SL Green co-chief investment officer – Isaac Zion – said, “We foresaw the demand for revitalized office product in downtown Brooklyn and are very pleased with the successful execution of our business plan."
SL Green is New York City's largest commercial landlord, which primarily acquires, manages, develops and leases commercial office properties in the New York Metropolitan area, especially mid-town Manhattan.
However, several big companies are choosing to resize their businesses and contain cost, which are adversely affecting the demand for office space. In addition, there is growth in supply of space for office use in the market. These challenges in the office real estate market are expected to have an adverse impact on the company’s shares which have underperformed its industry, year to date. During the period, shares of the company have lost 7%, while the Zacks Investment Research
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