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SL Green: Recent Ups (and Downs) of New York’s Self-Proclaimed “Largest Owner of Commercial Real Estate”

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Development company SL Green Realty Corp., who, alongside Wharton Properties, owns the long-term leasehold for the retail space at 650 Fifth Avenue, entered into a contract with Nike in June of this year for the more than 60,000 square feet of retail space in that building.  However, as of June 29, a federal jury found the owner of 650 Fifth Avenue, the Alavi Foundation, to be colluding with the Iranian government in violation U.S. sanctions against Iran.  Control of this building will soon shift to federal authorities, and it is unclear what implications this will have on SL Green’s holdings, if any.

Despite this recent uncertainty, SL Green is still going strong.  SL Green proudly flaunts the title “New York’s Largest Owner of Commercial Real Estate.”  Indeed, its presence can be felt all throughout the city, from the world’s tallest college dorm it helped design on Beekman Street to the historic Montague-Court Building it now owns in Brooklyn.

In mid-June, the company obtained demolition permits for some recent acquisitions near the World Trade Center.  After several years of buying adjacent properties, specifically 5-7 Dey Street, 187 Broadway and 183 Broadway, SL Green has amassed a substantial parcel of land on which it plans to build an office tower.  Up to this point, it has spent $92.2 million for roughly 86,600 square feet of space.  However, the space it currently owns is arguably not suitable for a tower.  There is the matter of 189 Broadway, which sits directly on the corner of Broadway and Dey, leaving SL Green with an L-shaped lot skirting around it.  If it purchases 189 Broadway as well, it will have a neat rectangular plot encompassing a large portion of the block.  The C5-5 zoning district in this area allows for a floor area ratio of 15, so with that corner lot the company would be able to build up to 200,000 square feet of space.  While 189 Broadway is currently owned by the MTA, recently, the MTA released a request for proposals for unused air rights at that location.  The air rights amount to about 62,750 square feet.  The MTA will retain 6,565 square feet of space for a subway stop – making the spot all the more valuable.  The deadline for proposals is July 12.

The potential build at Broadway and Dey Street would not be the first collaboration between SL Green and the MTA.  Uptown, the development company bought air rights around a subway stop at One Vanderbilt Avenue, and is currently constructing an office building under circumstances very similar to those at its Broadway development.  The Real Deal reports that One Vanderbilt will be the city’s second-tallest tower at 1,401 feet (although readers of this blog know that is not necessarily accurate).  Nonetheless, it is making waves in the development community due to its size, its proximity to Grand Central Terminal, and the aforementioned subway stop.

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