Manhattan Skyscraper Proves a Tough Sell for SL Green
It’s hard closing a deal in New York City.
The would-be buyer of a major interest in a $500 million Manhattan skyscraper has sued the seller, SL Green Realty Corp. alleging breach of contract.
But there’s a twist.
The lawsuit, filed this week in New York state court, accuses SL Green, New York’s largest office landlord, of convincing the servicer handling the $450 million mortgage to kill the deal. The buyer demands that SL Green try harder to convince the loan’s servicer CW Capital to approve the sale of the skyscraper, located at 485 Lexington Avenue.
“As soon as SL Green realized that the Sale was no longer advantageous, SL Green derailed the deal and stonewalled the approval process until it had an opportunity to terminate the Agreement,” according to the complaint. (Read the complaint.)
A spokesman for SL Green denied the charges saying the company’s executives were also disappointed the servicer did not approve the transaction.
The buyer is a joint venture between Optibase Ltd., an Israeli-based online video services company and Gilmore USA LLC.
When the deal was announced, investors viewed the sale as a positive for SL Green, which like all real estate owners, was trying to raise cash and wipe debt off its balance sheet. The sale required lender approval to transfer the mortgage, which has an attractive low interest rate.
SL Green took ownership of the building in 2004 when it was valued at roughly $225 million. It subsequently invested $90 million in it.
The company’s stock has close to doubled since August from roughly $26 a share to $45 a share.
February 06 2010 02:09 pm | Real Estate News