Jones Lang LaSalle


SL Green to convert clock tower into condos
by Catherine Tymkiw

Hotel developer Ian Schrager is partnering with real estate investment trust SL Green Realty Corp. and RFR Holding in a joint venture to convert One Madison Ave.’s clock tower into condominiums.

SL Green has been searching for a developer since last year, when it bought the formerly MetLife Inc. headquarters for $918 million. Reports late last year suggested SL Green was considering selling the property to the hotelier.

Under today’s agreement, SL Green will retain a 30% interest in the 43-story clock tower. If certain incentives are met, Mr.Schrager and RFR may increase their ownership stakes.
Mr. Schrager, the former co-owner of Studio 54, is known for turning hotels, including the Royalton and Paramount in Manhattan and the Delano in South Beach, Fla., into trendy hotspots.

One Madison Ave., built in 1909, is one of Manhattan’s earliest skyscrapers and takes up an entire city block. It sits on 1.93 acres overlooking Madison Square Park. SL Green said other details about the tower’s conversion would be announced "at a later date."

Separately SL Green said it signed a long-term leasehold for 521 Fifth Ave. -- a 40-story, 460,000-square-foot building.

The REIT has the option to buy the properties’ fee ownership from RFR Holding in five years. Including the option, the total value of the agreement is $225 million. The building’s average asking rents run $50.74 per square foot and tenants include Equinox Fitness Club, law firm Freedman and Fish and computer services firm Big Foot IMS.

©2006 Crain Communications Inc.