Morgan Stanley to sell New York City Park Avenue office condo to SL Green

SL GREEN Realty is in contract to purchase the office portion of Manhattan’s 500 Park Avenue, the former headquarters of PepsiCo, from Morgan Stanley.

SL Green agreed to buy the 11-storey office condo at the building, located at the corner of 59th Street, for roughly US$130 million, according to sources familiar with the deal, who asked not to be named discussing a private matter. The 201,411-square-foot property includes offices and retail space at the base. It is connected to a residential condo tower.

A Newmark Group team is handling the sales process. Representatives for Morgan Stanley and Newmark declined to comment.

The property is “a rare opportunity to own an iconic asset that has not traded in more than 40 years”, said Harrison Sitomer, chief investment officer of SL Green. “Park Avenue is the best-performing office market in New York City, with historic low vacancy, and 500 Park Avenue will continue to benefit from opportunities in this fortress corridor that attracts top-tier tenants and triple-digit rents.”

Investors have been bullish on New York offices that are well-located, especially on Park Avenue. Earlier this year, JPMorgan Chase agreed to buy 250 Park Avenue, a building near the bank’s upcoming headquarters, for more than US$300 million.

Citadel founder Ken Griffin has also pushed forward on efforts to construct a 62-storey office skyscraper at 350 Park Avenue for his businesses.

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Built in 1960 and renovated in 2019, the office portion of 500 Park Avenue was pitched as a “timeless asset with stable cash flow and strategic rent growth potential”, according to marketing materials. It is 94.5 per cent leased to tenants including SLR Capital Partners and Vera Wang.

Sl Green sold a stake last week in One Vanderbilt, its trophy office tower near Grand Central Terminal that is fully leased, to Japanese firm Mori Building. Last year, SL Green sold a share of nearby 245 Park Avenue to a separate Japanese firm.