SL Green Realty (SLG), BlackRock (BLK) Enter JV for Manhattan Rental Apt. Property
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SL Green Realty Corp. (NYSE: SLG) and BlackRock Real Assets, the real assets arm of BlackRock, Inc. (NYSE: BLK), a global leader in investment management, announced the formation of a joint venture for the ownership of 400 East 57th Street, a rental apartment property located in Manhattan. The transaction constitutes a sale by SL Green of a 49% ownership interest in the entity to an investment account managed by BlackRock at a gross asset valuation of $170 million.
In conjunction with the recapitalization of the property, New York Community Bank provided a 10-year $100 million mortgage loan at a 3% fixed interest rate.
“BlackRock continues to target high-quality assets in major markets as a means of seeking to deliver attractive risk-adjusted returns to our clients. The 400 East 57th Street investment fits very favorably within our investment strategy given its gateway market location, current income, and the potential for future value creation. We are excited about the opportunity to partner with SL Green. The partnership expects to continue to add value through a unit upgrade program and enhancement to the common areas and amenities,” said Benjamin Young, Managing Director and Head of US Real Estate Separate Accounts at BlackRock Real Assets.
“Investor demand for high-quality, well-located rental apartments in Manhattan continues to be robust,” commented SL Green co-Chief Investment Officer, David Schonbraun. “We are delighted to have BlackRock as a partner in the asset. Along with our current partner, Stonehenge Partners, we have been able to create value through renovating and repositioning the property. This transaction allows us to capitalize on some of the value created, while maintaining future upside through our remaining equity stake.”
400 East 57th Street is located on First Avenue and encompasses the entire east side of the block between 56th and 57th streets, featuring 261 luxury apartment units and 13,772 square feet of ground floor retail.
Andrew Scandalios and Rob Hinckley of HFF represented SL Green on the transaction.
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