SL Green, Morgan Stanley Strike $130M Deal
The transaction included the former headquarters of PepsiCo Inc.
SL Green Realty Corp., Manhattan’s largest office landlord, is expanding its Park Avenue portfolio with the purchase of the office portion of 500 Park Ave. Morgan Stanley sold the 11-story, 201,000-square-foot Class A mid-rise for $130 million.
The REIT bought the office component of the building that also has 19,911 square feet of retail. However, the retail portion of the property at the corner of 59th Street in the Plaza District was not part of the deal, nor were its 56 residential condominium units.
Newmark’s Adam Spies, Doug Harmon, Adam Doneger, Joshua King and Marcella Fasulo advised on the transaction.
Building, market highlights
SL Green plans to reposition the lobby, add building amenities and make substantial improvements to the public plaza.
Morgan Stanley has owned the building since April 1980, having acquired it from HJ Kalikow Co., according to CommercialEdge data. The property is subject to a 99-year unsubordinated net ground lease, which is held by Kalikow Holdings and expires in March 2079.
Completed in 1959, it has been institutionally owned and maintained since its construction as the former PepsiCo Inc. headquarters. The historic, landmarked property was designed by Skidmore, Owings & Merrill. Floorplates in the glass and masonry building range from 14,800 to 19,684 square feet, according to CommercialEdge.
The building had a cosmetic renovation in 1984. Its last renovation was in 2019, The Real Deal reported.
READ ALSO: Manhattan Office Shows Strength in a Still Lackluster Market
SL Green’s other Park Avenue properties include 100 Park Ave., 125 Park Ave., 245 Park Ave., 280 Park Ave. and 450 Park Ave. The REIT also owns 215 Park Ave. South and 304 Park Ave. South. Last year, an affiliate of Mori Trust Co. purchased a 49.9 percent stake in 245 Park Ave., a 1.8 million-square-foot tower.
Park Avenue is the best office market in New York City with historic low vacancy, according to SL Green, and 500 Park Ave. is set to benefit from opportunities in the fortress corner that attracts top tier tenants and triple-digit rents.
Building tenants include Vera Wang leasing 26,708 square feet for office space and a showroom; The Georgetown Co., 18,795 square feet; CI Capital Partners, 19,158 square feet; PPC Enterprises, 18,683 square feet, and Friedland Properties, CommercialEdge data indicates. The property’s retail space features high-end furniture store FRATO’s flagship New York City showroom.
SL Green moves
The acquisition announcement comes days after SL Green sold an 11 percent ownership stake in One Vanderbilt, its 1.7 million-square-foot skyscraper in Midtown Manhattan, to Mori Building Co. in a deal that valued the tower at $4.7 billion. SL Green will continue to own a 60 percent stake in the 59-story tower that was fully leased at the time of closing. The National Pension Service of Korea owns a 27.6 percent stake and Hines owns 1.4 percent. The LEED Platinum-certified building came online in 2020.
Last month, Bloomberg LP signed a renewal and expansion lease at another SL Green Midtown Manhattan tower—919 Third Ave. Bloomberg’s latest deal brings its footprint at the 1.5 million-square-foot, 47-story office high-rise to 924,976 square feet.
You must be logged in to post a comment.