So far, SL Green has signed just one tenant to its One Vanderbilt office tower. What about the rest? REIT hopes to average $150 per sf in rents
Marc Holliday and a rendering of One Vanderbilt
Some analysts worry that SL Green Realty may struggle to fill its office project One Vanderbilt with tenants amid a lackluster Midtown office market.
On last week’s earnings call, SL Green’s CEO Marc Holliday said the real estate investment trust will likely not start leasing until next year. The announcement “kind of reset expectations,” KeyBanc Capital Markets analyst Craig Mailman told the Wall Street Journal.
So far, SL Green has only signed on one tenant, TD Bank, which will take 200,000 square feet in the planned 1.7-million-square-foot tower. The company expects to average rents of $150 per square foot in the tower far above the current Midtown average of $80.45, according to CBRE. But during the call Holliday said even rents of $135 would still yield a 6 percent return on the tower.
Last year, SL Green landed a $1.5 billion construction loan from a syndicate led by Wells Fargo to fund the tower and earlier this year it announced that the National Pension Service of Korea had bought a 27.6 percent stake in the project.