NEW YORK (Reuters) - SL Green Realty Corp (SLG.N), a major New York property owner, said on Tuesday it agreed to sell a 43 percent interest in a Times Square office tower to the real estate arm of Germany’s Allianz Group in a deal that values the building at $1.95 billion.
The 54-story, 1.86 million square foot (172,800 square meter) building at 1515 Broadway in the heart of the city’s theater district is the international headquarters of Viacom Inc (VIAB.O).
SL Green President Andrew Mathias said in a statement that the transaction speaks to the continued strong interest in New York office assets from overseas investors.
Christoph Donner, chief executive of Allianz’ U.S. real estate unit, called the building a trophy asset that will give the firm’s growing New York portfolio significant upside.
Allianz has joint venture interests in three other New York office buildings, he told Reuters.
About 70 percent of the transaction is expected to close on Nov. 30, said SL Green, which is organized as a real estate investment trust. The remainder is expected to close in the first quarter of next year, the company said.
Isaac Zion, SL Green’s co-chief investment officer, said the deal was structured in the most efficient way possible.
The company in July said its goal was to structure the building’s sale in a tax-efficient manner.
SL Green will realize cash proceeds of $416 million after the final close, it said.
The building had mortgage debt of $876.6 million as of Sept. 30, SL Green said in recent regulatory filing.
SL Green acquired a 55 percent stake in the building in May 2002 for $483.5 million, and almost a decade later in April 2011 bought the remainder for $1.21 billion.
In October, SL Green finalized the acquisition with private investment manager RXR Realty of a 48.7 percent stake in Worldwide Plaza with a gross valuation of $1.725 billion. The 49-story tower is a few blocks from 1515 Broadway.
Doug Harmon and Adam Spies of brokerage Cushman & Wakefield represented SL Green in the transaction.
Reporting by Herbert Lash; Editing by Tom Brown and Meredith Mazzilli