SL Green, one of the city’s largest commercial landlords, just got bigger. The publicly-traded REIT headed by Steven L. Green is buying the landmarked former Daily News building at 220 E. 42nd St. for $265 million, or $242 a square foot.
At the same time, Green is buying a 40-percent condominium stake in 125 Broad St. for $90 million, or $172 a square foot – the first purchase it’s made downtown since 1999. Both deals are expected to close in early 2003.
The acquistions from Witkoff Group and DRA Realty Advisors up Green’s portfolio to 13.2 million square feet and 27 buildings, said company president Marc Holliday. Two years ago, Green had 9 million square feet in 22 properties.
“And when we went public in August 1997,” Holliday said, “We had about 2.2 million square feet in 9 buildings.”
Green was long known as the “King of the Class B Buildings,” but its recent acquisitions tell another story. Earlier this year, it bought 54-story, Class-A 1515 Broadway for $480 million.
The former Daily News building, an Art Deco masterpiece, was built in 1930. (The News years ago moved to the cheaper environs of 10th Avenue in the 30s.) Technically, Class A buildings are those completed since 1970. But the tower, refurbished and rewired a few years ago, hardly corresponds to the Class B image of older brick-facade structures.
Green had held a partial stake in the 1.1 million square-foot tower, which is 100 percent leased to firms including Omnicon Group, Tribune Company, and WPIX/Ch. 11. “Now we’re converting that interest into ownership of the entire asset,” Holliday said.
At 125 Broad St., Green is actually buying floors 2-15, or some 525,000 square feet of the tower’s total 1.3 million. The rest is owned by law firm Sullivan & Cromwell.
Holliday termed the downtown investment “not a change in our philosophy. We saw an opportunity downtown to pick up a property we think is a very conservative investment.
“There isn’t much lease rollover until 2010. By then, we’ll get to benefit from downtown’s revitalization and its new transit hub.”
In a statement, Witkoff Group CEO Steven Witkoff said, “I am happy to convert my owernship interests in the assets into a signficant ownership position in SL Green.”
Holliday explained that a “portion” of the price paid to Witkoff is in “operating-partner units convertible to SL Green stock.”