SL Green Sells a 40% Stake in Manhattan’s 11 Madison Ave.

  • Prudential arm’s purchase values the building at $2.6 billion
  • SL Green bought the property last year for $2.29 billion

SL Green Realty Corp., New York’s biggest office landlord, said it sold a 40 percent stake in Manhattan’s 11 Madison Ave. to Prudential Financial Inc.’s real estate investment arm in a deal that values the tower at $2.6 billion.

SL Green said it formed a joint venture with PGIM Real Estate for the 2.3 million-square-foot (214,000-square-meter) office property in the midtown south area. The partnership is seeking a modification to the building’s mortgage, which if not obtained within six months after the deal’s completion could result in SL Green buying back the sold interest from PGIM, the companies said in a statement Thursday.

Proceeds from the transaction, totaling about $480 million, will be used for debt reduction and other investments, SL Green said. The company bought the building -- adjacent to Madison Square Park between East 24th and East 25th streets -- last year for $2.29 billion. PGIM’s purchase price wasn’t disclosed. The company has a one-year option to acquire an additional 9 percent stake in the venture at the same gross property valuation.

“PGIM Real Estate shares our vision for 11 Madison Ave., a truly premier asset,” Isaac Zion, SL Green’s co-chief investment officer, said in the statement.

Stock Buyback

SL Green, which held interests in 119 Manhattan buildings totaling 44.7 million square feet as of June 30, also said Thursday that its board authorized the repurchase of as much as $1 billion of the company’s common stock.

PGIM Real Estate, which had $65.4 billion of gross assets under management at the end of March, works with about 500 institutional clients and invests mostly in the U.S., according to its website. The business is part of the $1 trillion asset manager of Prudential Financial, the second-largest U.S. life insurer.

Darcy Stacom and William Shanahan of CBRE Group Inc. advised SL Green on the transaction.

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