SL Green Snags $130M Mixed-Use NYC Office

As reported in GlobeSt, SL Green Realty Corp. (SLG) has acquired 500 Park Avenue, an 11-story Class A property with retail and luxury office spaces, to expand its Manhattan footprint.

Behind The Building

The building, which was Pepsi-Cola’s (PEP) former HQ, represents a rare addition to SL Green’s Park Avenue portfolio, which already includes prominent assets such as 100, 245, and 450 Park Avenue.

The property’s iconic design by Skidmore, Owings & Merrill underwent a major renovation in 2016, and SL Green plans further upgrades to modernize its amenities and public spaces. 

“500 Park Avenue is an extraordinary addition to our Park Avenue portfolio,” said Harrison Sitomer, SL Green’s chief investment officer.

Resilient Market

The major office acquisition comes just as Manhattan’s commercial real estate market is beginning to show some signs of strength. 

According to Avison Young, in Q3, Big Apple property transactions rose by 29%, with dollar volumes increasing by 16% compared to the previous quarter. By EOY, total investment sales and volume in the region are projected to rise by 16% and 76%, respectively.

SL Green, which owns 28.1 MSF of Manhattan property as of September, views Park Avenue as a “fortress corridor” with low vacancy rates and triple-digit rents, making it a prime location for high-end office assets.

Looking Ahead

With its acquisition of 500 Park Avenue, SL Green solidifies its dominance in Manhattan’s premium office market. 

The REIT’s planned renovations aim to attract top-tier tenants, aligning with the strong demand for Class A office space in Park Avenue’s competitive landscape.

Newmark (NMRK) served as an advisor on the purchase, underscoring the building’s strategic importance for SL Green’s continued growth in NYC.