SL Green’s agreement to sell 220 East 42nd Street (AKA Daily News Building) to Jacob Chetrit for $815 million has fallen apart. Chetrit and his partners were in discussions with Deutsche Bank for a mortgage to finance the acquisition after signing a hard contract in the fall. The loan would have been packaged into commercial mortgage-backed securities, but the lender backed out amid turmoil in debt and bond markets, WSJ noted.
- Changing times: SL Green will obtain possession of the $35 million deposit, and plans to retain the fully-leased office building.
- Broader perspective: Shares of Real Estate ETF, VNQ are down 37.7% since February 19th. The fund tracks a broad index that captures much of the US real estate market. This is a simple way to track the immediate reaction on Wall Street as other real estate data is now sparse.
- Worth Noting: SL Green’s stock is down 50.8% during the same time period. Unfortunately for the REIT, this comes after the firm re-purchased more than 22,855,030 shares under its share buyback program in the past two years. The goal was to take advantage of the gap between their consensus net asset value and share price.