SL Green Realty Corp. to acquire 461 Fifth Ave. for $62.3m.SL Green Realty Corp. has entered into an agreement to acquire the long-term leasehold interest in 461 Fifth Ave. for $62.3 million, or $312 per SF. The property is being acquired from an affiliate of Mitsui Fudosan Mitsui Fudosan Co., Ltd. (三井不動産株式会社 America, Inc. The approximately 200,000-SF Class A building is located on Fifth Avenue between 40th and 41st Streets, in close proximity to Grand Central Station. The going-in unlevered cash NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics yield on investment is 7.74% based on fully escalated in-place rents averaging in the high $50's per SF. 461 Fifth Avenue is 95.2% leased, and its major tenants include Ameriquest Mortgage Ameriquest was one of the United States's leading wholesale subprime lenders. Ameriquest was founded in 1979, in Orange County, California, as a bank, Long Beach Savings & Loan. Company, Shenkman Capital Management, Pier 1 Imports Pier 1 Imports Inc. (NYSE: PIR) is a Fort Worth, Texas-based retailer specializing in imported home furnishings and decor, particularly furniture, table-top items, decorative accessories and seasonal decor. (U.S.), and Marathon Asset Management. The transaction is expected to close at the end of the third quarter of 2003. The property is subject to a ground lease expiring in June 2084, which provides SL Green the ability to acquire the fee interest in the future. The discounted present value of the ground lease payments, inclusive of inclusive of prep. Taking into consideration or account; including. fee acquisition costs through the anticipated option closing date of September 2021, is $110 per SF. The leasehold acquisition will be funded, in part, with proceeds from the previously announced sale of 1370 Broadway. As a 1031 tax-free exchange tax-free exchange An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. , the transaction will enable the company to defer gains from that sale and from the sale of 17 Battery Place South, which was initially re-invested in 1370 Broadway. The balance of the acquisition will be funded using the Company's unsecured line of credit. Marc Holliday, president of SL Green, stated, "We are pleased to have the opportunity to work closely with the management of Mitsui Fudosan America and the fee owner in a transaction that was not broadly offered to the market. Our reputation as a reliable deal closer coupled with our proven ability to negotiate private, highly structured transactions enabled us to acquire this well-located Class A property on attractive economic terms. SL Green will receive an additional benefit by deferring approximately $18.5 million of taxable gain Taxable Gain The portion of a sale that is liable to taxation. Notes: When redistributing mutual fund shares that have increased in value, returns may be subject to taxation. See also: Capital gain, Income Tax through this acquisition. Sonnenblick-Goldman Company acted as the sole and exclusive broker in arranging for the acquisition of 461 Fifth Ave. |
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