SL Green in Talks to Sell NYC Real Estate Debt to Kushner, CIM

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(Bloomberg) -- SL Green Realty Corp. is in advanced talks to sell at least three loans attached to New York properties to bolster its cash balance, according to people with knowledge of the matter.

The real estate investment trust is in talks to sell a mezzanine loan position backing Brooklyn’s Industry City to CIM Group and a loan tied to a Manhattan office building to Rockwood Capital, the people said. It is also in advanced discussions with Kushner Cos. about debt on a residential property in Brooklyn.

The pricing of the loan sales couldn’t be learned but the levels being discussed are below par, some of the people said.

SL Green, a major New York landlord, has seen its shares battered this year amid concerns that the coronavirus pandemic will weigh on real estate values, particularly in big cities hit hard by the virus. The company announced last month that a $815 million deal to sell the former Daily News building in Manhattan collapsed and said it was suspending share buybacks.

As it seeks to shore up its balance sheet, SL Green has tapped Newmark Knight Frank and Eastdil Secured to market at least eight different loans, according to documents seen by Bloomberg News.

Representatives for SL Green, Kushner Cos., Eastdil, Newmark and Rockwood declined to comment. CIM didn’t immediately respond to a request for comment.

Rockwood is in discussions to buy the REIT’s $25 million junior mezzanine loan linked to 95 Morton St. in the West Village that pays an interest rate of about 7.6%. CIM is in talks to buy the company’s $71.5 million mezzanine loan tied to Industry City, which pays at least 7.5% and has only been funded up to $54.1 million. In addition, Kushner Cos. is negotiating the purchase of a $30 million mezzanine loan paying 8% interest backed by a multifamily building at 365 Bond Street in Brooklyn, according to the people familiar and documents.

Kushner Cos. was involved in transactions worth a combined $3 billion in 2019, according to its website. CIM, which describes itself as an owner, operator, lender and developer of real assets, owned and operated assets valued at roughly $30 billion as of Dec. 31 according to its website. Rockwood, a real estate investment firm, manages more than $8.8 billion of investor capital, according to its website.

SL Green, led by Marc Holliday, had mezzanine debt investments carrying a book value of $967 million as of Dec. 31, according to filings. It is slated to report earnings on Wednesday.

The firm has a market value of roughly $3.5 billion. Its stock has fallen more than 50% this year, outpacing the decline in the S&P 500 Index.

©2020 Bloomberg L.P.

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