SL Green Buys Into Lipstick Building

SL Green now controls its biggest trophy yet.

SL Green announced this morning that it paid $317 million for the majority of the land beneath the Lipstick Building at 885 Third Avenue. SL Green, along with its investing partner Gramercy Capital Corp, will control 79 percent of the fee portion of the building and 21 percent of the leasehold position.

This is not a separate deal from the one Haim Revah's Metropolitan Real Estate made (along with Israeli investor partners Tao Tsuot and Financial Levers) when it bought Lipstick for $648.5 million, a source said. Now, we simply know where some of that money came from.

SL Green will own most of the dirt below the building, while Metropolitan will control the tower itself, along with a private family that owned it during the time Tishman Speyer owned it.

The Lipstick deal, which went to contract back in April, has been a tricky one. Peter Slatin wrote a week ago that one of the reasons it's been so confusing is because Haim Revah has had such a tough time securing financing.

Up until today, no one knew SL Green was one of Metropolitan's backers. This should satisfy SL Green investors as we move closer to quarterly shareholders conference calls.

And even though SL Green is the city's leading office owner in raw square feet, the firm itself doesn't control any trophies, other than One Madison. The Lipstick Building is now officially the firm's most profitable trophy.