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Deutsche Bank blinks on Chetrit loan

SL Green’s $815 million deal to sell the former New York Daily News building has collapsed.

The REIT had already secured a $35 million deposit from the Chetrit Group after announcing in October, 2019, it would sell the 37-story art deco office building at 220 East 42nd Street.

It had spent several years repositioning the former newspaper HQ and bringing its occupancy to 97 percent after paying $265 million to buy it from the Witkoff Group in 2003.

According to the Wall Street Journal, Chetrit and his partners were in discussions with Deutsche Bank for a mortgage, but the lender backed out amid corona virus turmoil in debt and bond markets

ANDREW MATTHIAS

SL Green president Andrew Mathias told Real Estate Weekly, “While we’re disappointed the deal didn’t close, we will obtain possession of the deposit and retain a fully-leased, high-quality asset, with complete optionality to refinance, joint venture or sell after the market settles.”

The sale had been part of the firm’s strategy to sell assets in a healthy investment market and use the proceeds to buy back discounted stock of its shares.

In the past two years, it has repurchased more than 22,855,030 shares to take advantage of the gap between its net asset value and share price. Analysts are expecting SLG to reach a target price of $92.15 per share, which is 93.8 percent above the recent price of $47.55.

Last Wednesday, the company declared a monthly dividend of $0.295 per share of common stock, with chief financial officer Matt DiLiberto saying,

“We endeavor to reward our shareholders with a consistent dividend while recognizing the need to maximize liquidity,

“Modifying our dividend policy from quarterly payments to monthly payments will allow us to better match our distributions to the operating cash flow we recognize in this current market environment.”

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