Tuesday 24 April 2018

New York HQ of Credit Suisse sells for $2.29bn

SL Green Realty is paying $2.29bn for 11 Madison Avenue
SL Green Realty is paying $2.29bn for 11 Madison Avenue

David Levitt

SL Green Realty agreed to buy 11 Madison Avenue, the Manhattan tower that houses Credit Suisse's US headquarters, for $2.29bn (€2.06bn) in one of the biggest real estate transactions ever in New York City.

The seller is a partnership of the Sapir Organization and CIM Group, according to a statement. The 29-storey, 2.3 million square-foot property is between 24th and 25th streets in the midtown south area, overlooking Madison Square Park.

SL Green will also pay about $300m in costs tied to lease-stipulated improvements at the tower. The total price is the most paid for a single building in Manhattan since the 2008 acquisition of the General Motors Building for $2.8bn.

Commercial real estate values in places such as New York and San Francisco are surging as foreign and domestic buyers pour cash into high-profile assets in a wager on the economic stability of large U.S. cities. Centrally located office towers are fetching prices 33 percent above records set in 2008, according to an index from Moody's Investors Service and Real Capital Analytics.

The sale of a minority stake in the GM Building in 2013 valued the skyscraper at $3.4bn, according to Real Capital. Earlier this year, a deal to refinance debt on the MetLife Building valued the property perched above Grand Central Terminal at almost $3bn, people familiar with the transaction said in February.

Eleven Madison Ave. was originally designed as part of Metropolitan Life Insurance's headquarters complex, which also included the clock tower building to its south. The art deco-style tower, with an exterior of Alabama limestone, was built in 1929 and is listed on the National Register of Historic Places, according to the statement.

Credit Suisse is the biggest tenant in the building, which also will be the new headquarters of Sony's US unit.

SL Green is New York's biggest owner of office buildings, with properties such as Citigroup's HQ in Tribeca, the Graybar Building near Grand Central and the Viacom Building in Times Square.

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