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SL Green Looks To Sell Loans On 8 NYC Properties, Including Industry City

Industry City in Brooklyn

One of New York's largest property owners is working toward the sale of more than $100M of loans it owns, as REITs nationwide struggle to maintain cash flow amid the coronavirus pandemic. 

SL Green is in talks to sell debt on several properties to private real estate firms including Rockwood Capital, CIM and Kushner Cos., Bloomberg reports. These are the first of eight loans it plans to market.

SL Green is negotiating to sell a $25M junior mezzanine loan on RFR's 220K SF, eight-story retail property at 95 Morton St. in Manhattan to Rockwood, according to Bloomberg. Kushner is planning to buy the REIT's $30M mezzanine loan on Lightstone's 12-story, 460-unit luxury condominium building in Gowanus, Brooklyn, and CIM Group is discussing buying a $71M mezzanine loan backed by parts of Jamestown and Belvedere Capital's 6M SF multi-building complex Industry City along Brooklyn's waterfront. 

This is the latest in a series of financial woes for SL Green, which owns $967M in real estate debt, since the crisis began. The company’s stock has dipped 50% this year, and it announced it would halt its ongoing share buyback program.

REIT industry leaders have lobbied the federal government to allow them to slow down their dividend payments to investors as they race to keep enough cash on hand. By and large, REIT share prices have underperformed the broader stock market as questions mount surrounding the ability to collect rents.

Last month, SL Green’s $815M deal to sell the New York Daily News Building at 220 East 42nd St. fell through as the citywide shutdown began and markets began to ice over. It has successfully executed a sale since the beginning of the crisis, however, selling 315 West 33rd St. to Brookfield Asset Management for $446.5M on March 31, according to a Securities and Exchange Commission filing.