SL Green Realty Corp. and Gramercy Capital Corp. Announce $390.8 Million Agreement for SL Green to Purchase Investments

Strategic Insights -

SL Green Realty Corp. and Gramercy Capital Corp. have announced an agreement where SL Green will purchase investments from Gramercy Capital Corp. for $390.8 million, including $265.6 million in debt. This transaction is expected to close within the next 90 days, subject to certain conditions. The deal includes the purchase of SL Green's interest in several Manhattan office properties, totaling approximately 1.2 million square feet, and a $38.7 million mezzanine loan secured by equity interests in the Starrett-Lehigh Building.

Key Takeaways:

  • SL Green will purchase investments from Gramercy Capital Corp. for a total of $390.8 million, including $265.6 million in debt.
  • The transaction includes the purchase of SL Green's interest in several Manhattan office properties, totaling approximately 1.2 million square feet.
  • The deal includes the entire leased fee interest in 292 Madison Avenue, New York, NY for approximately $19.2 million, including pro rations, plus assumed mortgage debt of $59.1 million.
  • SL Green will also acquire a 45 percent joint venture interest in the leased fee of 885 Third Avenue, New York, NY, also known as the Lipstick Building, for approximately $39.3 million, including pro rations, plus assumed mortgage debt of $120.4 million.
  • The transactions will consolidate SL Green's position in the properties and bring the company's ownership to 100 percent in the joint ventures.
  • Andrew Mathias, President of SL Green, stated that the transactions conclude an important consolidation in their ownership of land and improvements representing 1.2 million square feet of prime Midtown properties.
  • Roger M. Cozzi, Chief Executive Officer of Gramercy, explained that the transactions enable them to monetize several non-controlling co-investment positions, produce a substantial increase in their corporate liquidity, and further deleverage their balance sheet.

Statistics:

  • Total purchase price: $390.8 million
  • Debt assumption: $265.6 million
  • Total square footage: approximately 1.2 million square feet
  • Mezzanine loan amount: $38.7 million
  • Mortgage debt assumed: $120.4 million, $86.1 million, $59.1 million

Sources:

  • SL Green Realty Corp. - http://www.slgreen.com
  • Gramercy Capital Corp. - http://www.gkk.com
  • NYSE: SLG
  • NYSE: GKK
  • September 30, 2010 - SL Green Realty Corp. press release
  • September 30, 2010 - Gramercy Capital Corp. press release