WPIX-TV—better known as New York’s CW11, broadcaster of addictive junk food like Gossip Girl—has renewed its lease for 104,000 square feet at 220 East 42nd Street through 2012. The rent was not disclosed, but the building’s asking rents are $58 a square foot.
It was a rare note of good news in landlord SL Green’s otherwise sober third-quarter Tuesday afternoon investor conference call, during which executives sought to allay concerns about the real estate investment trust’s $141.5 million investment in beleaguered real estate financial firm Gramercy Capital Corp. and SL Green’s exposure, along with other major landlords, to New York’s uncertain office market.
“I think we should just get right into it,” said Marc Holliday, CEO of SL Green, the city’s largest office landlord. “Effective yesterday evening, I resigned my position as CEO and president of Gramercy Capital Corp. I have done so in the belief that Roger Cozzi will be able to lead the company forward and tackle the many [challenges] the company faces.”
In the past year, Gramercy Capital Corp., of which SL Green is the largest investor, has seen its stock value decline nearly 97 percent. Mr. Holliday led the company since its inception in 2004.
One industry insider said Mr. Holliday’s resignation was an obvious sign of investor displeasure, but not necessarily a reflection of his performance.
“I don’t think Gramercy had a choice,” he said. “When a company’s stock is under $2, it’s almost impossible to keep your job as a CEO. Obviously, the shareholders are furious. But Marc Holliday is one of the brightest guys in the business.”
Mr. Holliday went on to discuss the company’s exposure to the Manhattan office market, which, in the wake of Wall Street’s demise, some analysts have called a weakness.
“Almost 70 percent of our total structured investment portfolio is secured by interest in Manhattan properties,” Mr. Holliday said. “[That] will prove to be a benefit, not a detriment, as it’s being viewed by some. The fact is that Manhattan is relatively more liquid than other [central business districts], due to the presence of international capital [and] the deep and diverse tenant base.”
The industry insider agreed: “The analysts have said they don’t like SL Green’s exposure to the financial industry. To me it’s the opposite: New York is what’s going to save SL Green.”