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SL Green’s deal to sell one of its trophy office buildings in Manhattan is off the table, costing the potential buyer $35M.
Jacob Chetrit had agreed to pay $815M for the former New York Daily News headquarters at 220 East 42nd St. last October, with the purchase due to close in the first quarter of the year. But Chetrit’s lender for the deal, Deutsche Bank AG, withdrew its support, The Wall Street Journal reports, killing the purchase.
SL Green confirmed to the newspaper that the agreement was canceled and that it had kept the deposit, which was reportedly $35M.
“While we’re disappointed the deal didn’t close, we will obtain possession of the deposit and retain a fully-leased, high-quality asset, with complete optionality to refinance, joint venture or sell after the market settles,” SL Green President Andrew Mathias said in a statement to the Journal.
SL Green has owned the 37-story building since 2003, when it paid $265M. The sale was expected to be a bright spot on an otherwise sluggish investment sales market in the city. Last year, deal volume plunged as investors processed the impact of the rent regulation laws.
With the world now reeling from the impacts of the coronavirus pandemic, the commercial real estate market has been frozen. The stock markets have been roiled by the crisis, though there were gains on U.S. stocks Wednesday as the Senate moved closer to agreement on a historic $2 trillion stimulus package.
SL Green's stock dropped from a peak of $95 in mid-February to a low of $41.15 at Monday's close. Its share price has rebounded with the broader stock market, and it was up to close to $50/share Wednesday afternoon.
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