$480 million for Times Square tower

SL Green agrees to buy 1515 Broadway in a post-Sept. 11 event

March 28, 2002|By BLOOMBERG NEWS

NEW YORK - A joint venture led by SL Green Realty Corp. agreed yesterday to buy 1515 Broadway in Times Square for about $480 million, marking the largest real estate transaction in New York since before Sept. 11.

The 54-story, 1.75-million- square-foot property is the headquarters of media company Viacom Inc. and houses the MTV studios.

The seller of the building is a partnership led by Axa SA's Equitable Life Assurance Society unit, Steve Solomon, a spokesman for New York-based SL Green, said in an interview.

The pace of New York office building sales is starting to accelerate as buyers bet that vacancy rates have peaked.

This month, Paramount Group, a German-backed investor, agreed to pay about $270 million for 712 Fifth Avenue and RFR Holding LLC won the bidding for 450 Park Avenue with an offer of $160 million.

"There's a lot of money out there for high-quality office buildings," said John Lyons, head of New York-based real estate investment bank Granite Partners.

"New York is still the financial capital of the world," Lyons said.

SL Green, the largest real estate investment trust focused exclusively on Manhattan property, will have a 55 percent stake in the Times Square property.

The company's partner is SITQ Immobilier, the real estate unit of Canadian pension fund Caisse de Depot et Placement du Quebec.

The building is 98 percent leased, and rents are 34 percent below current market rates, SL Green said.

Asking rents in the Times Square area are $48.70 a square foot, according to Insignia/ESG's March survey, down 13 percent from March 2001.

"It is a trophy property that sits in the very center of one of the great locations in the world," Green said in a statement.

The Times Square area underwent a renaissance in the 1990s, as the city and state bought old properties and resold them to developers.

Companies that have moved into the area include Ernst & Young LLP, Walt Disney Co. and Lehman Brothers.

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