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SL Green Sells NYC Asset Stake to Fund 11 Madison Avenue

Zacks Equity Research
Updated

SL Green Realty Corp. SLG has disposed its stake in a New York City office property for a gross asset valuation of $115 million. The sale is part of the company’s tax efficient strategy of disposing assets and redeploying the proceeds into its prized buyout – Eleven Madison Avenue.

This commercial condominium is situated at 315 West 36th Street. SL Green acquired the stake in this asset in late 2012 in a deal that had considered a gross asset valuation of $45 million. As such, the latest stake sale enabled the company to unlock substantial value from the building.

Off late, SL Green has been involved in a number of property dispositions for funding the Eleven Madison Avenue transaction. The company recently sold Tower 45 in Manhattan for $365 million. Moreover, it revealed a deal to dispose two retail development sites on Fifth Avenue for $125.4 million to a single buyer.

Considering the benefits that SL Green is poised to reap from Eleven Madison Avenue, such dispositions seem to be a strategic fit. The property is well-leased for the long term and is positioned in one of the city's strongest commercial office submarkets. This offers SL Green ample growth prospects.

Notably, in Aug 2015, SL Green disclosed the acquisition of Eleven Madison Avenue, a trophy asset in New York City, for $2.285 billion. The acquisition also included around $300 million of costs associated with lease-related improvements to the property.

SL Green currently carries a Zacks Rank #3 (Hold). Investors interested in REITs may consider stocks like First Industrial Realty Trust Inc. FR, Public Storage PSA and PS Business Parks Inc. PSB. All three stocks hold a Zacks Rank #2 (Buy).

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PUBLIC STORAGE (PSA): Free Stock Analysis Report
 
PS BUSINESS PKS (PSB): Free Stock Analysis Report
 
FIRST INDL RLTY (FR): Free Stock Analysis Report
 
SL GREEN REALTY (SLG): Free Stock Analysis Report
 
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Zacks Investment Research