PGIM buys NYC office stake for $480m

The firm acquired a minority interest in a Midtown tower with an option to purchase another stake.

PGIM Real Estate has purchased a 40 percent stake in a class A Midtown skyscraper for $480 million, the firm said Thursday.

The Madison, New Jersey-based firm bought the minority interest in Eleven Madison Avenue (pictured) from real estate investment trust SL Green in a transaction valuing the 29-story building at $2.6 billion. PGIM also has a one-year option to buy an additional 9 percent stake in the property at the same valuation.

SL Green purchased Eleven Madison Avenue in August 2015 for $2.6 billion from private equity real estate firm CIM Group and the Sapir Organization, a family-run real estate business, according to real estate data provider Real Capital Analytics. At the time, SL Green’s acquisition was the biggest deal for a single Manhattan office building since 2008 and the second-largest office transaction in US history.

Eleven Madison Avenue was 98 percent occupied as of last August, with major tenants including Credit Suisse, Sony and Yelp, according to RCA. Amenities at the 2.3 million square foot tower include a restaurant, a rooftop garden, a cafeteria and a barbershop.

“PGIM Real Estate’s investment in Eleven Madison Avenue represents a unique opportunity to partner with SL Green again and add to our portfolio another trophy-quality office property in Manhattan that will generate secure and stable income across market cycles,” said Kevin Smith, PGIM’s head of Americas.

PGIM has stakes in six other Manhattan office buildings, according to RCA. The firm, formerly known as Prudential Real Estate Investors, has $65.4 billion in assets under management, according to Thursday’s announcement.