SL Green Refinances 245 Park Avenue for $2.0 Billion
Key Facts
SL Green and its partner, Mori Trust's U.S. subsidiary, announced a $2.0 billion refinancing of 245 Park Avenue in Manhattan as part of efforts to extend debt maturities and bolster liquidity. The company said in the transaction statement that the new financing has a 5-year term and a fixed interest rate throughout. The financing replaces $1.768 billion in existing mortgage and mezzanine loans. Harrison Sitomer, the company's president and chief investment officer, said the transaction brings its "$7.0 billion financing plan for 2026" closer to completion. He added that the deal provides additional liquidity and strengthens the balance sheet while extending the company's debt maturities.
The contractual interest rate on the new financing was 6.52%, according to the statement, while SL Green's effective cost on its share differs after hedging. Hedging arrangements reduced the effective interest rate on the company's share to 6.37%, the rate applicable to its participation in the financing. When the company acquired the property, the existing loans carried a blended fixed interest rate of 4.30%, according to the acquisition statement. Those loans were due to mature in June 2027, before the new, longer-term refinancing was arranged. The current transaction therefore carries a higher interest rate than the blended rate disclosed for the loans at acquisition, even after the impact of hedging on the company's share.
SL Green's ownership of the property dates to September 2022, when it acquired the building with the aim of repositioning it alongside a partner, according to the company's partnership statement. Bringing another investor into the property was part of the approach the company announced at acquisition. The company subsequently sold a 49.9% stake to Mori Trust's U.S. subsidiary, which is now participating in the refinancing. The stake sale valued the property at $2.0 billion overall, according to the sale statement. As part of the building's redesign, SL Green engaged architectural firm Kohn Pedersen Fox Associates to help carry out that aspect of the project.
On leasing, SL Green said in a September statement that a new lease with Nearwater Management brought 245 Park Avenue to full occupancy. The lease runs for 8 years and covers 37,563 square feet, according to the details the company disclosed. Across its broader Manhattan operations, the company had signed 129 office leases totaling 1,760,649 square feet from the start of the year through that statement. Rents on the leases covered by the statement rose 15.8% compared with the previous fully escalated rents for the same spaces. The company added that its prospective leasing pipeline exceeded 1.0 million square feet.
Occupancy in the same-store Manhattan office portfolio reached 94.7% on June 30, 2026, according to the company's second-quarter results. That rate includes signed leases that had yet to commence, under the occupancy measure the company reported for the portfolio. The rate rose from 94.4% at the end of the previous quarter and 93.0% at the end of 2025, according to comparisons in the earnings statement. On corporate financing, SL Green had previously announced in March 2026 that it had refinanced and extended part of its credit facilities while lowering their overall cost. That transaction covered $2.0 billion of the company's total $2.4 billion in credit facilities.
Attention now turns to third-quarter 2026 results, whose release date SL Green set in a separate earnings schedule announcement. The company said it would publish the results after the market closes on October 21, 2026. Management will hold a conference call to discuss the results on October 22, 2026, according to the announced schedule. The call is scheduled to begin at 2:00 p.m. Eastern Time. At 245 Park Avenue, redevelopment work continues, with the company expecting completion in the first quarter of 2027, according to the refinancing statement.