SL Green pumps up retail assets with latest JV.

SL Green Realty Corp. in a joint venture with Jeff Sutton has acquired a controlling leasehold interest in 1604 Broadway--a retail property located on a prime corner in Manhattan's Times Square.

In a separate transaction, the partners are acquiring the leasehold interest in 379 West Broadway, a classic office/retail property in New York City's Cast Iron Historic District. The latter acquisition is expected to close before the end of 2005.

The two acquisitions reflect the further expansion of SL Green's retail real estate investment program. The program is designed to acquire undervalued retail opportunities on standalone sites or as part of commercial projects, and represents one of several initiatives to add incremental value to the Company's core Manhattan office property investment portfolio.

The venture reportedly paid $21 million for a 90 percent interest in the 41,100 s/f Times Square building. The property is subject to a ground lease that was extended from 2019 to 2036 as part of the transaction. Located at the southeast corner of Broadway and 49th Street, the property offers extensive signage and retail opportunities in the heart of Times Square.

In a second transaction, the partners are paying a reported $20 million for the leasehold interest at 379 West Broadway. The lease includes an option to acquire the fee interest in 2016. The five-story, 62,006 s/f property is fully leased and features frontage along both West Broadway and Wooster Street. The building's two retail tenants are Polo Ralph Lauren and Morgan LeFay.

The investments in 1604 Broadway and 379 West Broadway represent the latest of several joint ventures by the SL Green/Sutton team. In June 2005, the partners acquired adjoining buildings at 1551 and 1555 Broadway, a retail building at 21 West 34th Street, and a mixed-use property at 141 Fifth Avenue.

Andrew Mathias, Chief Investment Officer of SL Green, said, "With the investment in 1604 Broadway, we are increasing our already-significant presence in Times Square, one of the world's great office, entertainment and retail neighborhoods. 1604 Broadway presents the potential to unlock value from an under-performing property given its premier location. With Jeff Sutton's and SL Green's combined resources and expertise, we feel very confident in our ability to make meaningful profits through this retail program.

"The acquisition of 379 Broadway will establish a beachhead for us as we seek investment opportunities in [the neighborhood]."