A change in leadership at Stonehenge Partners is giving office giant SL Green and opportunity to increase its apartment portfolio.
New York City’s largest commercial property owner announced this morning that it has entered into an agreement to acquire a stake in a 23-building, 2.55 million square foot Stonehenge portfolio comprised of 2,815 rental apartments and 43,000 s/f of retail space.
SL Green will acquire the interests in the Stonehenge portfolio held through entities affiliated with Joel Seiden, who is stepping down as co-chairman of the company.
Ofer Yardeni, chairman and CEO of Stonehenge, has agreed to acquire all of Seiden’s interest in the Stonehenge management platform. Yardeni will continue to retain all of his ownership interests in the real estate portfolio which will continue to be managed and operated by Stonehenge Management LLC. SL Green will own a 50 percent share in both the partnership interests and promotes in the portfolio.
The REIT said the purchase price will be primarily funded through the issuance of $40 million of preferred SL Green operating partnership units.
David Schonbraun, SL Green’s Co-Chief Investment Officer, said, “This investment represents an incredible opportunity for SL Green to expand its residential portfolio in partnership with a proven operating partner.
“Over the past few years, we have developed a strong relationship with Ofer Yardeni and Stonehenge Partners. They are a best-in-class residential operator and we believe that together we can enhance the current portfolio’s value and build upon our previous successes.”
SL Green began a strategic effort to expand its multifamily investment platform in 2011 as city rents started a steady climb to what has become record levels.
The company purchased the Olivia office and apartment building from Stonehenge for $386 million in 2011 and later partnered with Magnum Properties to invest in a Williamsburg condominium. In another deal with Stonehenge last year, SL Green partnered on a $193 million deal to buy seven retail and multifamily properties in Manhattan.
Ofer Yardeni, chairman and CEO of Stonehenge, said this latest deal was a no-brainer.
“Stonehenge is excited to partner with SL Green again, and this time, in a much greater capacity. I have had the pleasure of working with the company for many years and partnered with them in prior investments,” said Yardeni. “Their extensive experience and expertise in the real estate industry is unparalleled and will add lasting value to Stonehenge.”
Yardeni also paid tribute to his partner of 25 year, Joel Seiden.
“I have been partners with Joel for the last 25 years. It has been a pleasure collaborating with him on a professional level and to have him as a friend. On behalf of myself and everyone at Stonehenge, I thank him for being an invaluable member of our family and we wish him all the best in his future endeavors.”
Seiden co-founded Stonehenge with Yardeni in the early 90’s. Since then, the company has been involved in over $4 billion of real estate transactions. The company now employs more than 200 people responsible for the management of a collection of residential properties located in some of the most desirable and exclusive sub-markets in Manhattan.
“It has been an honor to have co-founded and serve as co-chairman of Stonehenge. I have worked with the some of the finest people in the real estate industry,” said Seiden.
“I am leaving the company in excellent hands and I am confident that our strong team will continue to succeed and build on the important progress we have made.”
Seiden has plans to continue to pursue select ventures in the real estate industry, while spending more time with his family.
Bruce Schonbraun, Managing Partner of of FTI Consulting, acted as the advisor on the transaction.