SL Green Bags $250M for Opportunistic Debt Fund

A significant Canadian pension fund, reportedly Caisse de Dépôt et Placement du Québec, has dedicated $250 million for a brand new SL Inexperienced Realty Corp. opportunistic debt car.

The fund will concentrate on distressed credit score alternatives in New York’s workplace and retail actual property sectors, together with current loans, mortgage portfolios and controlling CMBS securities. It’ll additionally originate loans.

The $250 million dedication is only the start, since SL Inexperienced plans to boost roughly one other $250 million by the top of this yr. New York affords a strong pipeline of funding alternatives, in accordance with an organization assertion.

“After almost a four-year hiatus, we at the moment are… lending on and investing in mortgage and mezz loans and debt securities,” SL Inexperienced Chairman & CEO Marc Holliday mentioned in the course of the firm’s most up-to-date earnings name in October. 

“This quarter, we invested almost $110 million in varied debt and debt-like investments, and that’s on high of the opposite DPE funding exercise we did earlier this yr,” Holliday mentioned. “This marks the return to an especially worthwhile enterprise.”

The debt investments closed to this point mixed with the pipeline that the corporate has been constructing all through 2024 will serve to seed the debt fund, Holliday mentioned.

“The fund will present further capital sources enabling us to reestablish ourselves because the dominant supplier of subordinate capital for New York Metropolis industrial belongings,” he predicted.

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A significant industrial landlord in New York, SL Inexperienced holds an curiosity in 55 buildings totaling 31.8 million sq. ft. That features pursuits in 28.1 million sq. ft of Manhattan buildings and a pair of.8 million sq. ft securing debt and most well-liked fairness investments.

CDPQ, primarily based in Montreal, has about $452 billion in belongings beneath administration, together with $45.6 billion in actual property in additional than 1,500 properties.

Manhattan workplace market nonetheless struggles

The Manhattan workplace market continues to endure from weak demand. The variety of office-using jobs out there dropped 0.53 p.c year-over-year in September, in accordance with CommercialEdge, dropping positions in all main classes: monetary providers, info {and professional} and enterprise providers.

Asking rents in Manhattan decreased by 3.2 p.c year-over-year in November, averaging $68.48 per sq. foot, CommercialEdge stories. For the primary time in years, Manhattan wasn’t the most costly workplace market within the nation. San Francisco now has that distinction, besting Manhattan by 66 cents per sq. foot.

Traders are nonetheless , nonetheless. Manhattan continues to guide the nation in workplace asset gross sales quantity, reaching virtually $3.3 billion year-to-date by October, CommercialEdge famous.

That is almost double Manhattan’s $1.7 billion recorded throughout the identical interval final yr, although common sale costs out there have dropped in current months, to $344 per sq. foot, placing Manhattan fourth on the market costs amongst U.S. workplace markets.