SL Green High Bidder in Foreclosure of Leasehold Interest at 2 Herald Square in New York

SL Green Realty Corp. was the effective bidder for the leasehold interest at 2 Herald Square, at the foreclosure of the residential or commercial property this week.

Located on a prime corner of Herald Square at the intersection of Sixth Opportunity, Broadway and 34th Street, 2 Herald is a 369,000-square-foot workplace and retail building in one of Manhattan’s busiest locations. Foot traffic along the 34th Street passage, driven from Penn Station and Macy’s Outlet store, exceeds 100 million people annually.

Notable tenants in the structure consist of WeWork, which is primarily inhabited by Amazon, Victoria’s Secret and Mercy College.

As part of the offer, SL Green (NYSE: SLG) reached an agreement to produce a joint endeavor for the asset with an unidentified Israeli-based institutional investor, subsequent to closing on the acquisition.

SL Green did not divulge its bid quantity.

The acquisition would represent the real estate financial investment trust’s third go-around owning an interest in the residential or commercial property. It offered the land under the home in 2014 to Norges Bank Financial Investment Management and TIAA-CREF for $365 million and reported a gain on the sale of $18.8 million.

Then a year ago, it acquired loans on the home from a CMBS trust. The loans were in maturity default at the time of their acquisition. Since March 31, 2018, the loans had an outstanding principal balance of $250.5 million and an accumulated interest balance of $7.7 million.

The leasehold interest had originally been gotten by Sitt Possession Management in 2007 for $500 million and funded with the CMBS debt.

Individually, SL Green accepted sell the fee interest in the land underneath 635 Madison Ave. in New York City for $151 million to Safety, Earnings & & Growth Inc. The transaction, subject to particular closing conditions, is expected to be finished throughout the third quarter of 2018. SL Green bought the charge interest in 2014 for $145 million.

SL Green was represented by Adam Spies and Doug Harmon of Cushman & & Wakefield in the Madison Opportunity transaction.

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