Citigroup to Accelerate Purchase of NYC Headquarters Complexby
Deal scheduled for completion in June, up from end of 2017
Seller SL Green to have about $1.8 billion in proceeds
Citigroup Inc. agreed to accelerate the $2 billion purchase of its headquarters complex in Manhattan’s Tribeca neighborhood, moving up the planned completion date by a year and a half.
The deal for 388-390 Greenwich St. is now expected to close in June, according to a statement Wednesday from seller SL Green Realty Corp. The companies’ agreement in January had called for a completion in December 2017.
SL Green, New York’s biggest owner of office buildings, expects to realize about $1.8 billion in proceeds from the transaction. The company said it intends to use the money to repay a portion of a corporate credit line and retire the property’s $1.45 billion mortgage.
Citigroup will pay a $94 million fee tied to the early termination of its lease at the complex, SL Green said. The bank began consolidating its offices into the buildings after giving up its headquarters at 399 Park Ave. in Midtown.
“Earlier this year, we established 388-90 Greenwich Street as Citi’s global headquarters and are in the process of modernizing and unifying the buildings,” Kamran Mumtaz, a Citigroup spokesman, said in an e-mailed statement. “Accelerating the purchase of these buildings will result in significant cost savings. We look forward to completing the renovations to further deepen our ties to lower Manhattan, where our company was founded more than 200 years ago.”
SL Green on Wednesday reported a 24 percent increase in first-quarter funds from operations, a cash flow measure used by real estate investment trusts. It raised its full-year forecast for FFO before items to $6.96 to $7.04 a share from $6.90 to $7, based in part on the accelerated Citigroup deal.