SL Green Realty Corp. (SLG:US), New York City’s biggest office landlord, agreed to buy a residential-and-commercial building on Manhattan’s west side for $386 million as it seeks to expand in the apartment market.
SL Green will purchase the Olivia, a 492,987-square-foot (45,800-square-meter) building completed last year on 33rd Street, the New York-based company said today in a statement. The 36-story tower has 333 luxury rental apartments and 270,000 square feet of commercial space, with a movie theater, two office suites, a parking garage and retail stores.
“We see this acquisition as a great opportunity to expand our multifamily investment platform at a time when the New York City residential market is strong,” SL Green President Andrew Mathias said in the statement.
The real estate investment trust is acquiring apartment buildings as New York rents approach records. In December, the company agreed to buy property in the Williamsburg section of Brooklyn for its first residential investment in the borough. Also last year, SL Green joined Stonehenge Partners in a $193 million deal to buy seven retail and multifamily properties in Manhattan’s Midtown and Upper East Side neighborhoods.
The Olivia is currently owned by New York-based Stonehenge. Rents for a one-bedroom apartment start at $3,495 a month, according to its website.
The building’s commercial space is 100 percent leased at below-market rental rates, SL Green said. The acquisition also includes an adjacent lot.
The property is located between 8th and 9th avenues, near the far west side area where Related Cos. is developing its Hudson Yards project. The 26-acre (11-hectare) site will include office towers, residences and retail space in a transformation of a largely industrial space near the Hudson River.
“The anticipated substantial increase in pedestrian traffic between Penn Station and Hudson Yards is likely to strengthen that retail corridor, which we believe will significantly enhance the value of this property’s retail component,” Mathias said.
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