Ivanhoé Cambridge to exit Citigroup HQ stake

Ivanhoé Cambridge, the real estate subsidiary of the Caisse de dépôt et placement du Québec, has entered into an agreement to sell its 49.4 percent stake in Citigroup’s New York headquarters to SL Green Realty. A statement by the New York-based REIT values the asset at a total of $1.585 billion, making Ivanhoé Cambridge’s exit worth approximately $783 million.

The sale will give SL Green full ownership of Citigroup’s 2.6 million-square-foot property located at 388-390 Greenwich Street in New York’s Tribeca neighborhood. Callahan Capital Properties served as an advisor to Montreal-based Ivanhoe Cambridge on the transaction, and closing is expected to occur during the second quarter of 2014.

The property, which includes a 39-story office tower at 388 Greenwich Street and an eight-story office tower at 390 Greenwich Street, is triple-net leased to an affiliate of Citigroup through 2035 under a $1 billion extension deal announced in December. The agreement includes an option for Citigroup to acquire the properties during the period from December 1, 2017 through December 31, 2020. SL Green and an affiliate of Ivanhoe Cambridge acquired the buildings in late 2007 for $1.575 billion, according to data provider Real Capital Analytics.

“We have enjoyed a successful partnership with Ivanhoe Cambridge at 388-390 Greenwich, capped by Citigroup's recent lease extension, which was one of the largest lease transactions ever executed in New York,” said SL Green president Andrew Mathias in a statement. “Citigroup is one of the world's great financial institutions and has been a valued tenant at several SL Green properties.”

Through multiple partial ownership acquisitions, Ivanhoe Cambridge has established itself as a leading investor in the New York market over the past few years. In October, the firm made news when it acquired a 51 percent stake in 1211 Avenue of the Americas for $850 million as part of a strategy to expand its presence in the city.