SL Green and Citigroup are expected to close on the sale of 388-390 Greenwich Street ahead of schedule.
The city’s biggest landlord will make around $1.8 billion in sale proceeds, including a lease termination payment from Citi, which is exercising its option to purchase its Tribeca headquarters building.
In December 2007, 388 Greenwich Street and 390 Greenwich Street were sold by Citigroup in order to reduce real estate exposure on its balance sheet. The complex was later acquired by a partnership between SL Green and Ivanhoé Cambridge, a unit of the Société immobilière Trans-Québec (SITQ), for $ 1.58 billion. SL Green bought out SITQ for $783 million in 2015. Citigroup has maintained its primary presence in the complex through a 15-year leaseback arrangement.
In a statement issued today (Wednesday) SL Green said that it would accelerate the sale of 388-390 Greenwich Street to Citi and has reached an agreement for the early termination of Citi’s lease as a result of the sale acceleration. The sale is now scheduled to close in June 2016.
SL Green will use proceeds from the sale and the termination payment to repay a portion of its corporate credit facility and retire the$1.45 billion mortgage on the property, resulting in reduction of company indebtedness of approximately $1.8 billion.
SL Green Chief Executive Officer, Marc Holliday, said, “We are pleased to reach an agreement on the early sale of 388-390 Greenwich Street. In addition, by retiring approximately $1.8 billion of debt, we further strengthen our balance sheet and enhance our liquidity position to in excess of $1.4 billion.”
“Our longstanding, multi-faceted relationship with Citi, one of the world’s leading financial institutions, has been mutually rewarding and we look forward to continuing this important relationship for many years to come.”