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REA
October 11, 2017  

SL Green Showing Lexington Avenue Offices

SL Green Realty is marketing a Midtown Manhattan office building valued at about $305 million.

The 305,000-square-foot property, at 600 Lexington Avenue in the tony Plaza District, is suitable for core investors, given that it is virtually fully leased. At the estimated value of $1,000/sf, the buyer’s initial annual yield likely would be between 4% and 4.5%. CBRE has the listing.

The offering could attract heavy bidding, because there are few competing listings of mid-size Manhattan offices. Factoring in debt financing, a buyer would have to put up less than $100 million of equity, opening the bidding up to players priced out of big listings in the city.

The 36-story building, at the northwest corner of East 52nd Street, has a rent roll that features financial and law firms. The tenants include Element Capital, F5 Networks, HCC Indemnity Guaranty, LibreMax Capital and MKP Capital, according to CoStar. There is also some retail space, whose tenants include a FIKA coffee shop and Pret A Manger.

Asking rents in the Plaza District average $115.14/sf, the highest in the city and well above the $82.73/sf midtown average, according to Newmark.

New York-based SL Green teamed up with Canada Pension Plan to acquire the building in 2010 for $193 million, or $635/sf. The sellers were a fund operated by Houston-based Hines and Sumitomo Life Realty of New York. In 2015, SL Green bought out Canada Pension Plan’s 45% stake in a deal that valued the building at $284 million, or $936/sf.

The property, also known as 101 East 52nd Street, was developed in 1984 and renovated several times, including a lobby upgrade and the installation of new elevators.