SL Green has landed an investment partner at 245 Park Ave., the Midtown Manhattan building it bought out of bankruptcy last year.

New York City's largest commercial landlord sold a 49.9% equity stake in the 1.8M SF tower at a valuation of $2B, SL Green announced Monday. It acquired the building from HNA Group last year at the same valuation after HNA purchased it for $2.2B in 2017. The price tag is a positive sign in an environment where office values are expected to fall by as much as 35%.

Japanese real estate firm Mori Trust Co. acquired the stake in the property, its first investment in New York and second huge U.S. office acquisition in a year after paying $531M for a Washington, D.C., office building in September.

SL Green signed more than 85K SF of new leases at the building in the past month, and raising roughly $1B from the equity sale furthers its plan to reduce its leverage this year.

"The formation of this new partnership with Mori Trust reflects the continuing allure of investing in trophy midtown NY assets and resilience of the Park Avenue corridor as New York’s most desirable office market," SL Green Chief Investment Officer Harrison Sitomer said in a statement. "It is also an affirmation of the institutional capital markets’ recognition of the enormous potential for 245 Park to benefit from strategic investments and thoughtful stewardship."

After HNA acquired 245 Park in 2017, it quickly ran into trouble with its $1.7B acquisition loan. SL Green had a preferred equity investment in the property, which it used to position itself as a stalking-horse bidder for the property after HNA's 245 Park affiliate declared bankruptcy in 2021.

When SL Green officially took control of the asset last year, it assumed the debt on the building, which carries a fixed interest rate of 4.22% and matures in June 2027, according to SL Green's annual report. Mori Trust agreed to buy $500M of the debt on 245 Park as part of the sale, The Real Deal reported.