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SL Green Realty acquires Grand Central landmark.

In a major purchase of one of the Grand Central District's most famous buildings, S.L. Green Realty Corp. has completed the acquisition of the 250,000 square-foot property at 110 East 42nd Street (formerly known as the Bowery Savings Bank) for a purchase price of $30 million in cash.

The property's previous owner was 110 East 42nd Street Associates, LP, the principal of which is John Kluge. Funds for the acquisition were generated from the S.L. Green's recent initial public offering, through which it raised approximately $244 million in gross cash proceeds through the sale of 11.6 million shares of common stock.

The property, which consists of a five-story historic banking facility and adjoining 18-story office building, is located across the street from Grand Central Station which is currently undergoing a $176 million renovation and retail positioning.

While the property is presently 93 percent occupied (including tenants such as Greenpoint Savings Bank, Major League Soccer and Morgan, Lewis & Bockius), management of S.L. Green anticipates significant upside financial returns for the Company when the lease on 40,000 square feet of retail space expires during the fourth quarter of 1998, as well as through the leasing of the balance of vacant space.

Commenting on the acquisition, Stephen L. Green, chairman and CEO of S.L. Green, said "We are delighted to have been able to complete the acquisition of 110 East 42nd Street, right in the heart of Midtown Manhattan and in the Grand Central Station area, one of New York City's most exciting, re-emerging sub-markets. The transaction, which was made possible by our recent successful public offering, is in keeping with our strategy of owning, managing, leasing, acquiring and repositioning a variety of Class B office properties in Manhattan. In fact, S.L Green is currently the only publicly traded real estate company to invest primarily in Manhattan office properties. Subsequent to the acquisition, S.L. Green's portfolio consists of 10 properties, encompassing more than 2.4 million rentable square feet."

Class B office properties describe those which are typically more than 25 years old but which are in good physical condition, enjoy widespread acceptance by high-quality tenants and are situated in desirable locations in Manhattan. Class B office properties can be distinguished from Class A properties in that Class A properties are generally newer properties with higher finishes and obtain the highest rental rates within their markets.
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Title Annotation:S.L. Green Real Estate Inc. buys Bowery Savings Bank building
Publication:Real Estate Weekly
Date:Oct 15, 1997
Words:402
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