SL Green, one of New York City’s largest commercial landlords has announced its successful bid for the leasehold interest at 2 Herald Square. The company has also agreed to enter a joint venture with an Israeli-based institutional investor. The owners did not disclose their bid amount.
The 362,191-square-foot Midtown Manhattan office space was previously owned by Sitt Asset Management. After acquiring a 70-year leasehold in the property in 2007, the Sitt brothers used the asset to secure a $250 million CMBS loan. However, after losing a major tenant following the departure of H&M from the building’s retail roster, the company was unable to pay off or refinance the debt.
SL Green has had its eye on the property for some time. In 2014, the company sold the land under the building to a joint venture between Norges Bank Investment Management and TIAA for $365 million. Last year, the company stepped in and bought the defaulted loan, which at the time of the auction had an outstanding balance of $250.5 million and an accrued interest of $7.7 million.
Located near the intersection of Sixth Avenue, 34th Street and Broadway, the 11-story property includes 176,000 square feet of retail space, with foot traffic exceeding 100 million people per year. The current tenant roster includes Victoria’s Secret, Mercy College and Amazon (which occupies the entirety of WeWork’s 122,000-square-foot coworking space within the building).