SL Green Realty Corp. (NYSE:SLG) said Aug. 18 that it completed the acquisition of office property 11 Madison Avenue in New York City for $2.6 billion.
The deal includes approximately $300 million in costs associated with lease-stipulated improvements to the property.
SL Green CFO Matthew DiLiberto told REIT.com that the company faced “deep competition both from domestic and international capital” for the property. He noted that the deal’s 4.6 percent acquisition capitalization rate is particularly favorable. “Market cap rates for the highest quality assets in the city are going in the” range of 3 percent, according to DiLiberto.
SL Green agreed to purchase 11 Madison Avenue in May. During the company’s second quarter earnings call last month, CEO Marc Holliday described the property as “another trophy asset” for the company’s portfolio.
SL Green noted that 11 Madison Avenue has rents in place that are substantially below market, offering long-term growth opportunities.
The newly acquired office property is located in the Madison Square Park area of midtown Manhattan and is situated across the street from SL Green’s existing One Madison Avenue property. SL Green purchased the property from The Sapir Organization.