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Morgan Stanley to Sell NYC Park Avenue Office Condo to SL Green

By Natalie Wong
The New York City skyline seen from the Summit One Vanderbilt observation deck during the grand opening in New York, U.S., on Thursday, Oct. 21, 2021. The attraction takes visitors to the 93rd floor, high above iconic skyscrapers like the Empire State Building and the Chrysler Building, and features an immersive art installation called "Air," created by artist Kenzo Digital. Photographer: Jeenah Moon/Bloomberg (Jeenah Moon/Bloomberg)

(Bloomberg) -- SL Green Realty Corp. is in contract to purchase the office portion of Manhattan’s 500 Park Ave., the former headquarters of PepsiCo Inc., from Morgan Stanley. 

SL Green agreed to buy the 11-story office condo at the building, located at the corner of 59th Street, for roughly $130 million, according to people familiar with the deal, who asked not to be named discussing a private matter. The 201,411-square-foot (18,700-square-meter) property includes offices and retail space at the base. It’s connected to a residential condo tower.

A Newmark Group Inc. team including Adam Spies, Marcella Fasulo, Adam Doneger and Avery Silverstein 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 hasn’t 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 Ave. 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 & Co. agreed to buy 250 Park Ave., a building near the bank’s upcoming headquarters, for more than $300 million. Citadel founder Ken Griffin has also pushed forward on efforts to construct a 62-story office skyscraper at 350 Park Ave. for his businesses. 

Built in 1960 and renovated in 2019, the office portion of 500 Park Ave. was pitched as a “timeless asset with stable cash flow and strategic rent growth potential,” according to marketing materials. It’s 94.5% 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’s fully leased, to Japanese firm Mori Building Co. Last year, SL Green sold a share of nearby 245 Park Ave. to a separate Japanese firm. 

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