PGIM Real Estate has acquired a 40% interest in a $2.6bn Manhattan office tower owned by SL Green Realty Corp.
The transaction enabled SL Green, New York City’s largest office landlord, to pay down debt on Eleven Madison Avenue, a prime office tower with 2.3m sqft of space.
PGIM, the recently rebranded investment management business of Prudential Financial, and SL Green have entered into a joint venture for the transaction, which values the property at $2.6bn.
SL Green said it realised $480m (€430m) in cash proceeds.
The joint venture partners are seeking to modify the mortgage on the property within six months. A failure to do this, “may result in SL Green repurchasing the sold interest from PGIM Real Estate”, it was stated.
PGIM Real Estate has a one-year option to acquire an additional 9% stake in the venture at the same gross property valuation of $2.6bn.
SL Green’s co-CIO, Isaac Zion, said: “PGIM Real Estate shares our vision for Eleven Madison Avenue, a truly premier asset, and we are delighted to continue our long-standing, mutually beneficial relationship with this latest venture together.”
Kevin Smith, head of Americas at PGIM Real Estate, described the building as “another trophy-quality office property in Manhattan that will generate secure and stable income across market cycles.”
Eleven Madison Avenue is located directly east of Madison Square Park between 24th and 25th Streets, and spans one full city block.