Office Repositioning Pays Off as SL Green Fills 1.8M SF Tower
SL Green completed a $225 million overhaul of 245 Park Avenue and secured a $2 billion refinancing after reaching full occupancy in September. The 1.8 million-square-foot, 44-story tower underwent what CEO Marc Holliday described as a comprehensive renovation including a new wraparound plaza, a redesigned Park Avenue podium facade by KPF, upgraded tenant amenities, and a planned restaurant from LDV Hospitality. The work, expected to finish in March, transformed the property from a distressed asset into a competitive Park Avenue office building. Nearwater Management signed the lease that brought the tower to 100% occupancy, taking 36,563 square feet.
SL Green took control of the property in 2022 following a contentious bankruptcy by the prior owner, inheriting a building that was nominally 80% leased but facing significant rollover. Asking rents climbed from around $85 per square foot in 2022 to as high as $185 per square foot after the repositioning. The REIT had to rebuild tenant relationships disrupted during the bankruptcy and has since attracted Area Management, Carlyle Investment Management, EQT Partners, and Houlihan Lokey. Joint-venture partner Mori Trust and the Department of City Planning supported the transformation.
The new debt package led by JPMorgan Chase and six other banks replaced a $1.2 billion mortgage and a $568 million mezzanine loan. Holliday called the lender support “very satisfying” and credited the financing to the property’s successful turnaround. LDV Hospitality will occupy a 10,000-square-foot ground-level corner space on Park Avenue that had been vacant for years, though a restaurant concept has not been finalized. SL Green first entered the 245 Park deal as a lender in 2018 before taking full ownership four years later.
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