Tower portfolio acquisition completed.

SL Green Realty Corp. has announced that it has closed on its joint agreement with Tower Realty, Inc. and Reckson Realty Associates Corp. to purchase the fee interest in four New York City office properties totaling 675,000 square feet, for $84.5 million in cash ($125 per square foot).

The properties include an entire block-front in Midtown Manhattan between 40th and 41st streets along Madison Avenue (286, 290 and 292 Madison Avenue), and 90 Broad Street in Downtown Manhattan. The acquisitions increase SL Green's ownership of office buildings in Manhattan to nearly 8 million square feet.

SL Green had been evaluating the acquisition of selected assets of Tower since last summer. Prudential Securities and Lehman Brothers have served as SL Green's advisors on various transaction structures for these assets. Financing of the final transaction was arranged for SL Green through Prudential Securities and Deutsche Bank Securities.

The Madison Avenue properties, which are in the heart of the resurgent Grand Central District, range in size from three to 26 stories and encompass a total of about 336,000 square feet, with floorplates ranging between 5,000 and 10,000 square feet. The building's occupancy levels range from 85.5 percent to 98.8 percent.

The 25-story, 339,000-square-foot property at 90 Broad Street is currently 81.8 percent leased, with major tenants including MTB Bank (46,500 square feet), Walsh, Manning Securities (26,000 square feet) and Deforester & Duer (21,500 square feet). Floorplates range from 17,500 square feet at the base of the building, to 7,000 square feet at the top. The property is located directly across from 85 Broad Street - the headquarters of Goldman Sachs. The property also includes an adjacent parking lot which is a separate tax lot and represents immediate cash-flow from parking operations, with future development potential of approximately 100,000 square feet

Commenting on the transaction, Marc Holliday, Chief Investment Officer for SL Green, noted "This acquisition is right in line with our Company's financial objectives - providing us with the right balance of cash-flow stability and upside potential. For example, the Madison Avenue properties are 96 percent leased and are expected to provide SL Green with a stable source of in-place net operation income in a submarket experiencing strong leasing demand and little vacancy. At the 90 Broad Street property, there is substantial upside, evidenced by the leasing potential of 62,000 square feet currently vacant, and another 36,000 square feet expiring over the next two years at average in-place rents that are 10 percent below the prevailing market."

Stephen L. Green, chairman and CEO of SL Green, said "The purchase of these properties is consistent with our stated strategy of acquiring, owning, leasing and operating Class B office buildings in New York City's high-growth submarkets. Importantly, the Madison Avenue blockfront properties, which are right next door to a prime development site of approximately. 600,000 square feet of Class A space (one of only six new development sites in Manhattan), significantly strengthens our existing foothold in the Grand Central District. Also, our purchase of 90 Broad Street is significant because this property falls within our selective Downtown strategy of pursuing properties with market rents under $25 per square foot at a cost basis that we believe is attractive in light of today's market conditions."

With the acquisition of the Tower properties, SL Green's portfolio consists of 23 properties with approximately 8 million rentable square feet.

SL Green Corp. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) which primarily owns, manages, leases, acquires and repositions Class B office properties in Manhattan.